How to set up Non-Profit Organizations (NPO) in Turkey
Several Non-Profit Organizations are operating in Turkey for promoting common objective. According to the Internal Affairs of Turkey, the number of associations in Turkey raised up to 109549 in 2017 which increased by 56 percent over the last 14 years. In Turkey, there were 33717 associations for vocational and solidarity associations in 2017 that took first place among other types of associations. That was followed by sports and sport-related associations which were about 21116, while the number of association for the promotion of religious services was slightly lower 18010. The figure of the associations for children is very few in comparison with other types of associations which are just 18.
As it is clearly known that in the Non- profit Organizations focal point is the realization of the common objective rather than sharing of profit among members. According to article 56 of the Turkish Civil Code, the association is “a society formed by unity of at least seven real persons or legal entities for the realization of a common object other than sharing of profit by collecting information and performing studies for such purpose.” This definition written in Turkish civil code clearly shows that in order to form an association there must be at least 7 persons who can be natural persons or legal entities. It is explicitly written in Article 57 of the Turkish Civil Code that everyone has a right to form an association without prior permission. The founders of the association must have the capacity to act. Each Association has a statue where the name of the association, its purpose, sources of income, membership conditions, organs and organization and the temporary board of directors must be indicated based on the Article 58 of the Turkish Civil Code. The statutes of the Association cannot be contrary to the mandatory provisions of the law.
As it is clearly indicated in the article 64 of the Turkish Civil Code and article 3 of the Law on Associations that every natural person or legal person who has the capacity to act has the right to become a member of the associations. More specifically, in order to create children association or to become a member of children’s associations with permission of legal representatives, minors must be fifteen years old and have the power to distinguish. Furthermore, minors who have completed the age of twelve may be members of children’s associations with the permission of their legal representatives, but they cannot serve on the management and supervisory boards. These are in conformity with what is written in Article 3 of Law on Associations. No one shall be compelled to become a member of any association and no association shall be compelled to accept members. No one shall be compelled to remain a member of the association. Each member has the right to leave the association with written notice.
Members of the Association have equal rights regardless of their language, race, colour, sex, religion and sect, family, social standing. It is forbidden to implement practices that distort equality or grant privileges to certain members. All of these rights are clearly indicated in the Article 68 of the Turkish Civil Code. Furthermore, It is written in the Article 69 of the Turkish Civil Code that each member has one vote in the general assembly; member must use his or her vote personally.
Obligations of the members
Associations may require both the entrance fee and the association fee from the members of the association, which should be specified in the association charter. This obligation of the members is regulated based on the article 70 of the Turkish Civil Code and article 4 of the Law No. 5253 on Associations. Another obligation written in article 71 of the Turkish Civil Code which members of associations have to pay attention is that they are obliged to obey the order of the association and to show loyalty to the association. Each member is obliged to act in accordance with the purpose of the association, and in particular to avoid behavior that hinders or prevents the realization of the objective.
How do associations acquire legal personality?
According to Article 59 of the Turkish Civil Code, associations shall acquire legal personality as soon as they submit the declaration of establishment, association charter and necessary documents to the largest civil administrative authority of the province. The declaration of the establishment and the accuracy of the documents and the statutes of the association shall be examined by the highest authority in sixty days based on Article 60.
Foreign associations, by taking the opinion of the Ministry of Foreign Affairs and with the permission of the Interior Ministry, may operate in Turkey and cooperate, open branches, and establish parent organizations based on Article 92 of Turkish Civil Code and Article 5 of the Law on Associations. It is worth to note that in terms of international activities of Turkish associations, in order to achieve the objectives set forth in their statues they may engage in international activities or cooperation, may open representative offices or branches abroad, establish associations or higher organizations abroad or participate in associations or organizations established abroad. Furthermore, according to article 20 of the Law on Associations, associations by giving notice to local authority may receive in-kind and cash assistance from persons, institutions and organizations abroad.
Do associations have to pay taxes?
Not all the associations are exempted from taxation in Turkey. In order to be exempted from taxation, associations must carry the status of publicly beneficial association; otherwise, they may not enjoy exemption of taxation. In order for an association to be considered as a publicly beneficial association, proposal of the Ministry of Interior upon the opinion of the relevant ministries and the Ministry of Finance and decision of the Council of Ministers must be common in this way.
Article 27 of the Law on Associations No. 5253 shows that in order for an association to be considered as a public benefit association;
1. The Association has to be active for at least one year,
2. The purpose of the Association and the activities undertaken to achieve this objective should be of sufficient quality and extent to the society.
Publicly beneficial associations are exempted from value-added tax, inheritance tax, property tax, stump duty, customs duty and etc.
Türk Medeni Kanunu
Derneklerin Vergilendirilmesi Rehberi, 2012
Turkey: Law No. 5253 of 2004, Associations Law