Definition, Subject Matter, and Sources of Tax Law

Entrance

One of the most fundamental needs of states is to meet public expenditures. The most important tool for financing public expenditures is taxes. Taxes are an essential financial resource for the modern state to maintain its existence, provide public services, and ensure social welfare. However, considering taxation solely as an economic concept is insufficient. The collection, application, and control of taxes are governed by specific rules. This set of rules is called tax law

Tax law is a branch of law that both regulates the financial capacity of the state and directly affects the property rights of individuals. In this respect, tax law is not only a financial matter but also an area closely related to fundamental rights and freedoms.

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1. Definition of Tax Law

Tax law, in its broadest definition, is the branch of public law that regulates the rules arising from the tax relationship between the state and individuals. In other words, all the rules that determine the limits within which the state can exercise its taxation authority, the creation, collection, and termination of tax liability fall within the scope of tax law.

a) Elements of the Definition

• The state's power to tax: The state levies taxes under the authority granted to it by the Constitution. This authority is not unlimited; it is framed by fundamental principles of law and the laws enacted by the legislative body.
• Individuals: These are the natural and legal persons who are liable for tax debt.
• Tax relationship: The legal bond established between the state and the taxpayer upon the occurrence of a taxable event.

b) Public Law Nature

Tax law public law . This is because the tax relationship is not between equals, but between the state, which possesses superior authority, and individuals. Therefore, the state exercises unilateral powers in the taxation process; however, these powers are limited by the Constitution and laws.

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2. Subject Matter of Tax Law

Tax law encompasses all legal transactions related to taxation. Three main dimensions stand out here:

a) The Creation of Tax Liability

The fundamental subject of tax law is when and how a tax liability arises.

• Taxable event: A taxable event is the legal or factual situation, as defined in tax laws, that gives rise to a tax liability. For example, in terms of income tax, earning income; in terms of value-added tax, the delivery of goods or the provision of services are taxable events.
• Taxpayer and responsible party: The taxpayer is the natural or legal person directly involved in the taxable event. However, in some cases, individuals obligated to pay taxes on behalf of another person also fall under the scope of tax law as responsible parties.

b) The Taxation Process

Another aspect of tax law is the taxation process. This process assessment, notification, accrual, and collection .

• Tax assessment: The legally mandated calculation of a tax liability.
• Notification: This is the proper notification of tax liability to the taxpayer.
• Assessment: The time when a tax becomes final and payable.
• Collection: The actual collection of tax receivables by the state.

c) Tax Disputes

Tax law also tax disputes . Conflicts arising between taxpayers and the administration are resolved before tax courts and the Council of State. Tax litigation safeguards the rights of taxpayers while ensuring that the administration acts within the framework of the law.

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3. Sources of Tax Law

The sources of tax law show where tax-related rules originate. Sources are divided into two categories: primary sources and secondary sources.

a) Primary Sources

i. Constitution

The most fundamental source of tax law is the Constitution.

• Article 73 of the Constitution states : “Everyone is obligated to pay taxes according to their financial capacity to cover public expenditures. Taxes, duties, fees, and similar financial obligations shall be imposed, amended, or abolished by law.” This provision establishes the principle of legality in tax law . In other words, no tax can be levied without a law passed by the Turkish Grand National Assembly.
  

ii. Laws

The broadest source of tax law is tax laws. In Türkiye, the main tax laws are as follows:

• Income Tax Law (ITL)
• Corporate Tax Law (KVK)
• Value Added Tax Law (VAT Law)
• Tax Procedure Law (VUK)
• In addition to the Law on the Collection Procedure of Public Receivables (AATUHK), there are many other special laws such as Special Consumption Tax, Stamp Duty, and Property Tax
  

iii. International Agreements

The international dimension is also important in the field of taxation. Double taxation avoidance agreements, in particular, are considered among the primary sources of tax law. Turkey has such agreements with many countries.

b) Supplementary Resources

i. Case law

Court decisions in tax litigation, particularly the precedents of the Council of State, serve as guidelines in the application of tax law. While not legally binding, these decisions shape the development of tax law in practice.

ii. Doctrine

Academic studies, interpretations, and explanations by scholars in the field of tax law are considered as supplementary resources.

iii. Administrative Regulations

Circulars, notices, and directives issued by the Ministry of Finance are administrative regulations that explain how laws should be implemented. Although these regulations are not binding, they are of great importance to taxpayers in practice.

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4. The Relationship Between the Principles and Sources of Tax Law

The sources of tax law also shape its fundamental principles. The main ones are:

• Principle of Legality: Taxes can only be imposed by law. (Constitution Article 73)
• Principle of Universality and Equality: Everyone pays taxes according to their financial capacity.
• Principle of Predictability and Certainty: The subject, rate, and taxpayer of the tax must be clearly defined.
• Fiscal Capacity Principle: The tax burden should be distributed fairly according to the economic circumstances of individuals.

These principles provide both constitutional guarantees and guidance in the interpretation of tax laws.

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5. The Importance of Tax Law from the Perspective of Public Order

Tax law is not only a field of financial regulation, but also an indispensable tool for maintaining public order. The importance of tax law can be summarized in the following points:

• State financial independence: Taxes are the guarantee of the state's economic independence.
• The rule of law principle: Strict rules in tax law prevent arbitrary taxation.
• Freedom to seek justice: Making tax disputes subject to judicial review protects the legal security of individuals.

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Conclusion

Tax law is a branch of law that regulates the collection of taxes, the state's most fundamental source of revenue, and defines the financial obligations of individuals. Its scope encompasses a wide range of areas, from the creation and collection of tax debts to the taxation process and the resolution of disputes. Its sources vary, from the Constitution to laws, international agreements, and supplementary regulations.

Strong regulation of tax law serves both the state's ability to effectively deliver public services and individuals' right to property and legal security. Therefore, tax law is an indispensable element not only of the financial system but also of a democratic state governed by the rule of law.