Examples and Concept of Shell Companies for Tax Evasion in Relation to Free Trade–Industrial Zones
Keywords:
Tax Evasion, Aras Free Trade and Industrial Zone, Examples, Business License , Tax Exemption , Shell CompaniesAbstract
One of the tax-related issues in free trade–industrial zones is tax evasion through exemptions from tax payment. Among such regulations is Article 13 of the Law on the Administration of Free Trade Zones, which stipulates that economic actors in free zones are exempt from paying taxes for twenty years. This incentive has led to the establishment of shell companies. This article attempts to address the numerous examples and the concept of such companies in the Aras Free Trade Zone. According to field research conducted in the Aras Free Trade Zone, since its establishment, more than 18,771 companies have been registered. Of this number, 9,835 business licenses were issued, of which fewer than 1,870 were actually active, while the rest were inactive at the time of data collection. What is noteworthy is that some of these companies were in fact operating in the mainland. This situation has acquired a specific conceptual nature, the formation process of which is explained in the subsequent sections of this article. The research findings reveal that shell companies in free zones share certain conceptual and practical similarities with mainland shell companies, while also diverging in some aspects.
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