Hiring a Turkish accountant

Every tax system has some pitfalls. You will lose money if you do not carefully plan ahead, or work with an accountant that knows where the pitfalls are.

So “avoiding pitfalls” is a good enough target for a Turkish taxpayer. Actually, in most cases, just avoiding pitfalls does it. But the thing is, you cannot avoid pitfalls by yourself. You will need a competent Turkish accountant to help you.

The ideal accountant will present you these features :

– knowledge of your business : this goes without saying, but the accountant needs to analyze your workflow, at least at the level of bookkeeping, and present you with a plan or directions on how you should proceed to comply with local regulations. Chronologically speaking, this should be the first thing your accountant does after signing a contract with you.

– knowledge of your tax positions going forward : the accountant has to estimate your costs and revenues, both in amount and timing, and come up with an overall understanding of your probable future tax positions. This is especially important for Turkish subsidiaries of foreign companies which do a lot of trade with group companies. Issues like transfer pricing, cost-reflecting invoicing, royalties and other services rendered by related parties, and the witholding taxes and reverse-charge VAT are all laden with pitfalls if you do not plan ahead.

– knowledge of your reporting requirements : you will need to communicate to your accountant your reporting requirements, or standards, and your accountant has to have grasped the meaning of requirements of international reporting. This is especially important because local reporting requirements are mostly based on tax positions, and sometimes deviate from basic principles like accrual basis, or substance over form.

– understanding of the Turkish tax system as it applies to you : your accountant may be expert in taxation of construction businesses, but this may not mean much to you if you are not a construction business yourself. It is very important that your accountant can filter, amongst the deeply complex Turkish tax regime, only the rules that apply to your business. This is required to keep things simple and focused.