NEWSLETTER-2019-metin

317 TAX LAW Liability for Tax Debts of Limited Liability Companies* Att. Canan Doksat Introduction The liability regime plays a key role for new investment plans for both local and foreign investors. Liability for tax debts constitutes a critical point for investors in order to decide upon the type of company through which they will perform their commercial activities. Under Turkish tax legislation, provisions regarding liability for tax debts of both joint stock and limited liability companies (“LLC”) are regulated within Tax Procedural Code No. 213 (“TPC”) and Law on Procedures of Collection of Public Receivables No. 6183 (“LPCP”). According to the provisions of the above-mentioned Laws, firstly, it is regulated that the legal entity of the limited liability company is to be responsible for any unpaid tax debts of the company. If the tax debt cannot be wholly or partially collected from LLC, or it is apparent that the public debt will not be collected from the LLC, the liability of the shareholders and/or legal representative arises. It should be noted that important analysis are made in the recent Constitutional Court and unification of judgment decisions in relation to the liability of shareholders and legal representatives for the tax debts of LLCs. Within this scope, this Newsletter article evaluates the main principles regarding the liability for tax debts of limited liability companies. The Responsibility of a LLC as the Legal Entity It should be noted that the legal entity of an LLC, firstly, is responsible for the unpaid public receivables, such as tax debts, of the company. The responsibility of the shareholders and the legal * Article of June 2019