Resolving Tax Controversy
Base in Istanbul, Nazali Tax and Legal Services is a highly renowned firm who provide a wide range of consultancy and litigation services both nationally and internationally. We spoke to Ersin Nazali, managing partner at the firm, to find out more about the work they do, and get his unique insight into the many challenges facing the tax industry today.
Since their inception in November 2014, Nazali Tax and Legal Services have embarked on a journey of continuous
growth. In total, there are seven partners, seven lawyers, two sworn financial advisers and four certified public accountants and four associates. According to Nazali, the experience and dedication of their staff has allowed them grow significantly within such a short period of time.
“Even though Nazali is a newly established firm, the volume of restructuring transactions it conducts and litigation cases it follows-up has increased considerably,” Nazali stresses. “Currently Nazali provides tax consultancy and litigation services to its both local clients and international clients (investors) for their affiliates in Turkey” he adds.
“The reason behind this is because our lawyers and consultants work together as a team in almost each transaction,” added Nazali. “As they all have parallel experiences and deep knowledge on tax/ fiscal issues, they complement each other perfectly and therefore have a major role in the successes of our firm” he goes on to say.
As a result of their wealth of experience and expertise, Nazali is confident that their firm can provide a truly exceptional service that is highly distinguishable from their peers. As Nazali outlines: “All of our lawyers and consultants are seasoned professionals who had formerly worked in a number of different areas,” says Nazali. “As such, our firm guarantees the most accurate service to its clients, especially in the areas of tax and commercial law.
“Ultimately, we stand out from the crowd thanks to our team who have worked in the Ministry of Finance and Internal Revenue Service as tax inspectors for many years, and have therefore extended their knowledge and high experience with private sector and tax audit companies. Thus both of our consultants (sworn financial advisors and certified public accountants) and lawyers who have public and private sector experiences as executives (working both as auditor and auditee), so they are very capable to provide people based solutions by considering the clients’ business strategies and necessities.”
With this unique blend of attorneys and certified accountants, Nazali provide a variety of services in the field of tax law. This includes advisory services such as transfer pricing, tax planning, tax due diligence and international taxation. Alongside this, the firm also provide restructuring services, including consultancy for domestic investments under the scope of international agreements, mergers and spin off transactions.
Furthermore, Nazali also work on tax dispute resolutions, whether it be consultancy on tax inspections, or the representation of the clients before the report evaluation commissions or followup tax litigation. “As Nazali, we offer our clients consulting and litigation services about all disputes in tax, social security and customs areas. The most common dispute our clients face in practice, about which our firm has significant experience and knowledge, are in areas such as tax inspection consultancy, settlement meetings and litigation, to name just a few.”
When asked about their approach towards tax advisory services, Nazali responded: “Our aim as aa tax adviser is to guide our clients to manage tax as an operating cost as well as enabling their companies to operate in line with tax regulations.
Within this scope, our priority is detecting the potential tax risks of companies (through conducting tax DD’s), reviewing the problems, enabling to decrease the tax burden (through tax planning), giving guidance regarding certain tax practices and informing and providing solutions by analysing financial and commercial status and understanding the clients’ needs.”
In terms of restructuring, Nazali firmly believes that their mix of accountants and attorneys is particularly useful in this respect. “In some cases, the ‘restructuring’ appears as full or partial spin-off, vertical or horizontal mergers and conversions of company types, whereas sometimes is seen as equity/capital restructuring or acquisitions/take over transactions.
“Due to their nature, these transactions should be performed considering both commercial code and tax legislation, otherwise, if restructuring is not carried out properly, serious consequences may arise. Thus, in order to benefit properly from the transaction, it is crucial that this complex process is carried out by a single source that can provide advice in both commercial law as well as accounting and tax aspects. In this aspect, all necessary financial and legal services are provided with our expert team in Nazali.”
In terms of their clients, Nazali cater for a highly diverse range of individual and businesses. In this regard, their advisers are constantly in close contact with their clients in order to deliver the best possible service. “We have both Turkish and multinational clients and provide all above mentioned services to their affiliates and for both their Turkey related transactions and abroad restructurings. We have offices in İstanbul (main office), İzmir (for Aegean region), Ankara and we planning to have one in Bursa shortly.
So, we periodically visit our clients (the ones residing in Turkey) and hold meetings for evaluating their needs. Our foreign clients have contacted us through reference firms and keep in touch by holding conference calls and our periodic reporting about the progresses in tax legislation, or the phase of the litigation followed by Nazali. We also issue circulars about any tax related news in Turkey and send e-mails to whole clients”
As a company that is deeply dedicated to serving their clients, the company is constantly looking at the latest trends and developments occurring in their industry. Of course, tax has made many headlines this year, and according to Nazali is simply not a prevailing issue in his region. “In respect of Turkey, as it is not a tax heaven country the ‘payment of tax’ is inevitable; meaning that if an investor wants to do business in Turkey, it has to incur/bear the tax consequences.
“In other words, as long as an investor (company) pays its debts duly, no controversy preventing it to do business will emerge. On the other hand, there are vital tax incentives and tax allowances enabling business. To conclude, even though one has to face tax controversy in business life, this can be moderated and smoothened by the assistance of a tax advisor conscious of tax friendly measures.”
Much like any other industry, another major trend in tax has been the continuous influence in technology. As Nazali, explains: “Both companies and investments have evolved continuously, and it has become much easier to do business and transfer goods, services and capital globally by the aid of technology. Since scope of business extended highly, it is not easy to control and audit these transactions in respect of tax authorities any more compared to five years ago.
“Therefore, to eliminate base erosion and profit shifting (BEPS) and control inter-company transactions, the measures taken by the
governments, including Turkey, have increased considerably especially because of the vast improvements in information technology, internet environment and accordingly commercial life.
These measures can be listed as an increase in number of tax inspectors (doubled) and tax inspections, increase in criteria of reporting by banks and finance institutions, controlling customs, exports and imports, introducing new income tax law enabling monitoring individual’s private capital transactions etc.”
Looking further into the latter half of 2016 and beyond, there are many challenges facing their firm. “Turkey is going into a new era about tax issues as both current income and corporate tax will be abolished and new income tax legislation will be announced; and the same is valid for current tax procedural law. Besides, the number of tax inspectors are doubled to conduct much more and qualified inspections, against both companies and individuals.
“With this in mind, we can say that approach of Turkish Tax Authority is getting more disciplined which means that tax payers now have to be much more careful about their investments and accordingly work with tax experts to eliminate tax assessment risks. We hope that we will continue to serve our clients in this regard.”
Nazali Attorney Partnership
Name: Ersin Nazali
Address: Elit Residence, 19
Mayis Blv, Dr.Ismet Ozturk Str.
No: 3/28, Flr:10, Sisli/Istanbul