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The Lump Sum Expense rate used in the declaration of rental European Court of Human Rights. The convention prevents
income mentioned in the third clause of the article 74 of incorrect interventions on basic rights and freedoms as well
the Income Tax Law was reduced to 15% from 25% with the as providing protection against legal regulations that might
article 14 of the Law 7061 released in the Official Gazette cause the violation of basic rights and freedoms. Because of
dated December 5, 2017. Based on the subsection (ç) the feature of the convention system, the decisions of the
clause 1 of the article 123 of the same law where execution European Court of Human Rights mentioned in the Legal
provisions are regulated, this rate shall be applied to the Safety Principle are important in that they enable us to see
revenues acquired starting January 1th, 2017. the effects of this principle.
In the article 74 of Income Tax Law it is stated that “Those Both the Constitutional Court and the European Court of
who accept taxation on the basis of lump expense shall not Human Rights are of the opinion that the precautions on
be entitled to give up this procedure of taxation before the the taxation are an intervention on the Property Right. The
lapse of two years.” Based on this article, it has become decision of the Constitutional Court on the Ford Engine
clear that taxpayers who provided real property income Company dated 13.12.2017 and the decision of the
declarations according to the Lump Sum Expense Method European Court of Human Rights on Serkov-Ukraine Case
for the year 2016 for the first time cannot choose to use dated 07.10.2011, which is one of the similar decisions in
the Real Expense Method for the following year. This new the same field, are examples of this situation.
regulation increases the tax liability of taxpayers since it is
effective on the decisions made by the taxpayer in the past. As a conclusion, we may claim that individuals will face
unforeseen financial burdens because of their financial
This situation contradicts with the Legal Safety Principle, decision in the past with this legal regulation. Such a legal
which is a common value protected in the basic rights. Legal change, which may affect the executive rights of individuals
Safety requires that the rules of law are general and their on their properties in an unforeseen manner and in a direct
practices are foreseeable; and are organized in a clear and manner, will harm the trust of individuals in the state. For
certain manner. The legal safety principle is closely related this reason, it is important that individuals foresee the
with the “Supremacy of the Law” principle mentioned in the interventions made through taxation and adapt their decision
Foreword of the European Convention of Human Rights in the in accordance.

Explanations in this article reflect the writer's personal view on the matter. EY and/or Kuzey YMM ve Bağımsız Denetim A.Ş. disclaim any responsibility
in respect of the information and explanations in the article. Please be advised to first receive professional assistance from the related experts before
initiating an application regarding a specific matter, since the legislation is changed frequently and is open to different interpretations.
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