Annulment Of Certain Provisions Of Law No. 7194
A. Examination of the First Sentence of Paragraph (2) of Article 7 of the Law
Article 7 of Law No. 7194 In paragraph (2) of Article 7 of Law No. 7194; digital service providers that are digital service taxpayers or their authorized representative in Turkey, No. 213, the Ministry of Treasury and Finance will decide to block access to the services offered by digital service providers -until these obligations are fulfilled- if these obligations are not fulfilled within thirty days from the notice to fulfill their obligations to submit declarations and pay taxes regarding the taxes covered by the Tax Procedure Law and the announcement of this situation on the website of the Revenue Administration, and this decision will be sent to the Information and Communication Technologies Authority to be notified to access providers, It is stipulated that access providers shall fulfill the requirements of blocking decisions within twenty-four hours from the notification.
It has been evaluated that the rule, which allows the blocking of access to the services provided by digital service providers, restricts the freedom of undertaking of digital service providers.
The measure envisaged by the subject rule is a special tax security practice for digital service taxpayers. Therefore, the rule serves the purpose of ensuring the realization of the public benefit targeted by the taxation activity. Accordingly, it is understood that the rule is based on a constitutionally legitimate purpose.
On the other hand, due to the intangible nature of the digital economy, the traditional tax system and rules are insufficient for the effective taxation of this sector. Accordingly, blocking access to the services provided by digital service providers, who are digital service taxpayers who do not fulfill their obligations to submit declarations and pay taxes regarding the taxes within the scope of Law No. 213, is considered to be convenient and necessary in terms of achieving the purpose of fulfilling these obligations. As a matter of fact, the blocking of access to the services provided by service providers will be valid until the fulfillment of these obligations pursuant to the rule.
However, a reasonable balance must be established between the freedom of enterprise and securing tax receivables. In this context, the sanction envisaged in the subject rule should not impose an excessive and unbearable burden on the owners of the undertakings.
Considering the function of the internet, which is one of the basic tools of our age, and the conveniences it provides, it is natural to resort to certain measures through the website where they carry out all their activities instead of traditional tax security measures, which are understood to be insufficient to ensure that digital service providers, who do not have a physically fixed workplace and generally operate electronically, fulfill their tax obligations. However, it should be sought that the legal protection method defined in the law, i.e. the tool, should be proportionate to the purpose to be protected by law. In this context, if there is a measure that may cause less harm to the rights and freedoms of the individual, it should be sufficient or this measure should be applied first.
In this framework, blocking access to the services provided by digital service providers who do not fulfill their obligations to submit declarations and pay taxes within the scope of Law No. 213 within the time limit means blocking access to the entire website, which is the most severe sanction. However, while it is possible to establish a gradual tax security measure, it has been evaluated that deciding to block access directly imposes an excessive burden on service providers, and the reasonable balance between freedom of enterprise and public interest is disrupted. In this respect, it has been concluded that the restriction imposed on the freedom of undertaking by the rule is disproportionate and violates the principle of proportionality.
For the reasons explained above, the Constitutional Court decided that the rule is unconstitutional and annulled, and that the annulment shall enter into force nine months after the publication of the decision in the Official Gazette.
B. Examination of the First Paragraph of Provisional Article 4 added to Law No. 3332 by Article 41 of the Law
The rule subject to the lawsuit stipulates that until 31/12/2014, all kinds of instruments sold directly or indirectly as shares or under the name of shares at nominal or premium value by joint stock companies whose shares are deemed to have been offered to the public due to the number of shareholders and whose shares are traded on the stock exchange shall be deemed to be shares, payments made to these companies shall be deemed to have been made in exchange for shares and a partnership relationship shall be deemed to have been established, and the fact that these shares are not dematerialized shall not prejudice partnership rights.
Since all payments made to the joint stock companies mentioned in the rule are deemed to be made in exchange for shares, the property rights of the savers who make such payments and the joint stock companies are in conflict. The State is obliged to take certain measures within the scope of its positive obligations to protect the right to property. If the regulations envisaged by the legislator cause disproportionality against one of the parties in establishing the balance of interests, it may be incompatible with positive obligations in terms of the right to property. In this context, the interests of both parties should be balanced as much as possible and the process should not be finalized in a way that would result in a disproportionate outcome against one of the parties.
It is understood that the rule subject to the lawsuit aims to protect the property rights of other shareholders who hold shares in the companies in question, to secure the rights of third parties who have commercial relations with these companies and to ensure that the company continues its activities under free market conditions. However, the interests of the savers have been significantly affected due to the determination of the nature of the legal relationship between the savers and the companies pursuant to the rule. The authority of the savers to file a lawsuit within the framework of the provisions on default of receivables and to initiate enforcement proceedings in relation to this receivable has been eliminated. Although the savers have been transformed into shareholders, the savers do not have the opportunity to leave the partnership. Although there is no legal obstacle to the transfer of the share, it is difficult to state with certainty that the value of the share will cover the value of the receivable arising from the savings placed in the company. Considering these issues, it is understood that the rule subject to the lawsuit does not provide effective solutions in establishing the balance of interests between the companies and the savers and results in a shift in the balance of interests in favor of the companies. On the other hand, it has also been observed that no legal guarantee is provided to ensure that the savers do not lose their rights due to the payments they have made.
In the light of these evaluations, it has been concluded that the rule imposes an excessive burden on the savers and does not balance the conflicting interests of the parties by disrupting the balance of interests that should be observed between the savers and the companies in the context of the right to property against the savers.
For the reasons explained above, the Constitutional Court decided that the rule is unconstitutional and annulled.
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