Asset transfer is defined as the action of transferring a good/group of goods or a property of an establishment by any natural person or legal entity to another natural person or legal entity. Although the issue of asset transfer is not specifically regulated in the Turkish Legal System, there are provisions directly or indirectly related to this issue in various laws. The foremost of the relevant provisions, are the articles 202 and 203 of the Turkish Code of Obligations No. 6098 regarding assets and business transfers, and articles 134-158 of the Turkish Commercial Code No. 6102 regarding company mergers.

According to the Code of Obligations Article 202, '' Person who has taken over a property or a business together with its assets and liabilities, starting from the date that he/she announced this to the creditors or announced in the Trade Registry Gazette for commercial enterprises, or announced with an advertisement to be published in one of the newspapers distributed throughout the country for others, is responsible for the debts in his/her property or business against those people. However, the former deptor remains responsible as a joint deptor with the transferee for two years. This period, for the due debts, starts from the date of notification or announcement; for the debts that will be due later, starts from the date it became due. The results of undertaking debts in this way are identical to the results from the external undertaking contract. The two-year period stipulated in the second paragraph shall not be initiated unless the obligation to notify or announce is fulfilled by the transferee. '' According to article 203 of the same law, "If an enterprise is combined with another enterprise by mutual acquisition of assets and liabilities or joining one to the other, the creditors of both enterprises have the rights arising from the acquisition of an asset and can take all their receivables from the new enterprise.'' In the 11th article of the Turkish Commercial Code, the transfer of the enterprise has been reorganized specifically, and in the case of an enterprise transfer, the scope and form of this transfer was stipulated, and mergers are specially arranged in the articles 134-158.

In order to obtain the desired results from merger and acquisition type activities, primarily, the provisions of the Commercial Code, the Law of Obligations, and privately, the legislative provisions that determine the legal basis to which the mergers will be subject, should be examined.

According to the aforementioned articles, when a legal entity takes over an enterprise (company) with its assets and debts, it is also responsible for the debts and receivables of this company as well. As understood from the articles 202 and 203 of the Turkish Code of Obligations, the transferror and the transferee are held jointly responsible for the payment of the debts for two years following the notification or announcement to the creditors.

The relationship between the transferror and the transferee depends on the contract for the transfer of the assets and liabilities of the enterprise. However, pursuant to Article 7 of the Law on the Protection of Competition No. 4054, mergers and acquisitions that would constitute a dominant position in a particular market or strengthen an existing dominant position were prohibited, and transfers that may be included in this scope over a certain value are also subject to the Competition Board's permission. The legal approval of the transfer should be announced through the means of communication stipulated in the legislation.

The transfer of assets can be taxed as it can be considered as the income of the selling company and therefore there is a corporate tax liability. Asset transfer is generally subject to VAT on the sales value of the assets. Although the VAT rate varies for different assets (1%, 8% and 18%), the overall VAT rate is 18%. VAT liability can be reduced by various methods such as investment incentive certificates.

Important articles related to the asset transfer:

a) Turkish Code of Obligations: Article 202 and Article 203
b) Turkish Commercial Code: Articles 134-158
c) Enforcement and Bankruptcy Law: Article 280
d) Law on Collection Procedure of Public Receivables: Article 30
e) Competition Law: Article 7