Introduction
The Law on the Restructuring of Certain Receivables,
also known as “Tax Amnesty” and “Tax Restructuring” entered in force with its
publication in Official Gazette No. 31506 on June 9, 2021.
1.
What are the
regulations within the scope of the Law on Tax Amnesty?
Within the scope of Tax Amnesty, regulations cover restructuring
of;
Ø
Certain tax
receivables
Ø
Uncertain tax receivables
or tax receivables at court stage
Ø
Transactions at tax
inspection or assessment stage
In addition to above, the tax amnesty regulations also
cover the followings:
Ø
Voluntary tax base
and tax increase
Ø
Correction of company
accounts
Which tax receivables will be
subject to restructuring?
Receivables that will be subject to restructuring are
identified as follows;
o
Taxes (taxes, duties
and taxes within the scope of TPL) and tax penalties,
o
Customs taxes and
administrative fines,
o
Insurance premiums,
o
Community insurance
premiums,
o
Pension deductible
and corporate money,
o
Unemployment
insurance premium,
o
Social security
support premium,
o
Various
administrative fines,
o
Interest, delay
charges and similar payments related to the above-mentioned receivables
What is the term of receivables
included in the scope?
Receivables
within the scope of the Tax Procedural Law:
Ø
Taxes, late payment
interests and similar charges regarding periods before 30.04.2021 (this date
included), as well as taxes and related charges that should be have been
declared until mentioned date,
Ø
Regarding 2021; the
taxes accrued before 30.04.2021 (this date included), and related tax
penalties, late payment interests (except for the second installment of the
motor vehicle tax for 2021),
Ø
The tax penalties
regarding detections made prior to 30.04.2021 (this date included) that are not
related to tax principal.
Regulations Regarding Certain Receivables
The table below summarizes the restructuring of
certain tax receivables which accrued but had not been paid yet.
Type of Receivable |
Amounts Payable |
Amounts waived |
Tax principal |
All tax principal |
Entire amount of penalties related to tax principal,
as well as administrative fines |
Penalties that are not related to tax principal |
50% of the penalties that are not related to the tax
principal |
Remaining 50% of the penalties that are not related
to the tax principal |
Penalties imposed due to participation |
• 50% of the tax penalties imposed due to the
participation |
• Remaining 50% of tax penalties due to
participation |
Accessory receivables |
• The amount to be determined on the basis of Domestic
Producer Price Index (D-PPI), instead of late payment interest, and delay charges |
• All of the accessory receivables such as late
payment interest, delay charges |
The debtors who want to benefit from the provision of
this article must not file a lawsuit, abandon the lawsuits and not resort to
legal remedies.
Regulations Regarding uncertain and disputed Receivables
a) In tax assessments for which a lawsuit has been
filed before the court of first instance or the period of filing a lawsuit has
not yet expired as of the date of publication of the Law; in case 50% of the
tax principal as well as a delay charge calculated on the basis of D-PPI until
the date of publication of the Law is paid in the time and manner specified in
the Law, then the remaining 50% of the tax principal and late-payment interest
shall not be collected.
b) In tax assessments for which the objection or
appeal period has not expired as of the date of publication of the Law, or for
which objection or appeal has been made, or for which the period for the
request for correction of the decision has not expired or for which the remedy
has been applied; the last stage of the assessment as of the date of
publication of the law will be taken as basis for restructuring of the disputed
tax liability. Depending on the status of the latest decision before the
publication of the law, the opportunities for restructuring are as follows.
Latest decision |
Amount to be paid |
Amount not to be collected |
In case the tax court cancels the assessment |
- 10% of the tax principal -Amount to be calculated according to D-PPI |
-90% of the tax principal - late payment interest and similar charges, as well
as entire amount of penalty related to tax principal |
In case the tax court entirely or partially approves
the tax assessment |
-Entire amount of approved taxes - 10% of abandoned taxes - Amount to be calculated according to D-PPI |
-The remaining 90% of abandoned taxes - late payment interest and similar charges, as well
as entire amount of penalty related to tax principal |
In case the latest decision is an annulment decision |
-50% of taxes -Amount to be calculated according to D-PPI |
-The remaining 50% of taxes - late payment interest and similar charges, as well
as entire amount of penalty related to tax principal |
In case the latest decision is partially approval,
partially annulment (for the part that is approved) |
-All of the approved taxes - 10% of abandoned taxes - Amount to be calculated according to D-PPI |
- The remaining 90% of abandoned taxes - late payment interest and similar charges, as well
as entire amount of penalty related to tax principal |
In case the latest decision is partially approval
partially annulment decision (for the part that is annulled) |
· 50% of taxes · Amount to be calculated according to D-PPI |
Remaining 50% of taxes - late payment interest and similar charges, as well
as entire amount of penalty related to tax principal |
c) If a lawsuit has been filed only regarding tax
penalties as of the date of publication of the Law; the collection of all
penalties and related late fees will be waived, provided that the taxes are
paid before the date of 09.06.2021 when the Law is published or paid in the
time and manner specified in this law.
The table below shows the restructuring of such
disputed penalties.
Phase |
Amount to be paid |
Amount not to be collected |
Those who have been sued before the court of first
instance or those whose litigation period has not passed yet |
25% of the penalty |
75% of the penalty |
In case of a decision regarding the abandonment of
those who are at the stage of objection or appeal |
10% of the penalty |
90% of the penalty |
In case of a decision regarding the approval or amended
approval for those who are at the stage of objection / appeal |
· The 50% of the penalty approved · The 10% of the abandoned penalty |
· The remaining 50% of the penalty · The remaining 90% of the abandoned penalty |
In case the latest decision is an annulment decision |
25% of the penalty |
75% of the penalty |
In case the latest decision is partially approval,
partially annulment (for the part that is approved) |
· 50% of the penalty approved |
· The remaining 50% of the penalty |
In case the latest decision is partially approval
partially annulment decision (for the part that is annulled) |
25% of the penalty |
75% of the penalty |
d) As of the date of publication of the Law; claims
for which an application has been made to benefit from the provisions of settlement,
the settlement date has not been given, or the settlement date has not arrived,
or the settlement date has not been reached, but the deadline for filing a
lawsuit has not passed, may also benefit from the provision of this article.
e) The debtors who want to benefit from the provision
of this article must not file a lawsuit, abandon the lawsuits and not resort to
legal remedies in addition to the conditions specified.
Regulations Regarding Transactions at the Inspection
Stage
Regarding the periods covered by the Law, tax inspections started before the date of publication of the Law, shall continue, without prejudice to the provisions of this Law regarding tax increase. Following the completion of these procedures, the following will be applied in the subsequent assessments.
Debtors who want to benefit from the provision of this
article must not file a lawsuit, in addition to the conditions specified.
As of the date of publication of the Law, the
provision of this article will also be applied for the receivables at
pre-assessment stage.
It is not possible for the beneficiaries of the
announced regulation provision to benefit from the provisions of settlement,
pre-assessment settlement and reduction in tax penalties.
2. Voluntary Tax Base and Tax Increase
In Article 5 of the Law, it is stated that if the tax
bases or taxes for 2016 and the following years related to some taxes are increased
at certain rates, no tax inspection or tax assessment shall be made for mentioned
periods.
2.1. Corporate Tax
Within the framework of the regulation, it is stated
that corporate taxpayers can increase the tax bases already declared for the
years 2016, 2017, 2018, 2019 and 2020 no less than the rates specified below.
Period |
Rate of Increase in Tax-Base (%) |
Minimum Increase in Tax-Base (TL) |
Tax Rate to be Calculated on the Increased Base (%) (*) |
2016 |
35 |
94.000 |
20 |
2017 |
30 |
99.600 |
20 |
2018 |
25 |
105.800 |
20 |
2019 |
20 |
112.400 |
20 |
2020 |
15 |
127.500 |
20 |
(*) If the taxpayers submitted the annual corporate
tax return and made related payments on time, and provided that they do not
have any definite or disputed debts for these tax types, the tax rate over the
increased bases will be applied as 15%, instead of 20%.
In case the taxpayer declared loss in related period,
only 50% of the loss can be utilized in 2021 and the following years.
The taxes previously paid through withholding cannot
be deducted from the taxes calculated over the increased tax bases.
2.2. Withholding Taxes
In accordance with the law, if taxpayers increase
their tax base for the following payments subject to withholding, by certain
rates, no tax inspection or assessment will not be made for the relevant
periods.
Payments within the scope of the relevant regulation include:
·
Wage payments, professional
service payments, progress payments for multi-year construction works, rent
payments, various payments made to farmers, payments made to those who benefit
from the tradesman exemption,
·
Progress payments for
multi-year construction works and rent payments made to cooperatives within the
framework of the provisions of Article 15 of the Corporate Tax Law,
·
Progress payments for
multi-year construction, within the framework of the provisions of Article 30
of the Corporate Tax Law.
It is foreseen that the tax bases for the payments
within the scope will be increased by the following ratios.
Period |
Rate of increase in wages, professional service
payments and rent payments (%) |
Rate of
increase in progress payments for Multi-Year Construction Works (%) |
2016 |
6 |
1 |
2017 |
5 |
1 |
2018 |
4 |
1 |
2019 |
3 |
1 |
2020 |
2 |
1 |
In order to benefit from the increase in income and
corporate tax withholding tax base, it is not necessary to increase the income
or corporate tax base.
2.3. Value Added Tax
If the taxpayers declare the value added tax, which
will be determined as a tax increase over the annual total of the output value
added tax in tax returns, not less than the following rates, the value added
tax inspection and assessment cannot be conducted for the relevant periods.
Period |
Increase
rate (%) |
2016 |
3 |
2017 |
3 |
2018 |
2,5 |
2019 |
2 |
2020 |
2 |
It is not possible to consider the VAT paid within the
scope of the relevant regulation as an expense in determining the income or
corporate tax base. In addition, it is not possible to deduct the relevant
amounts from the VAT payable or to be subject to a refund.
It is obligatory for taxpayers to increase for all
taxation periods of the calendar year based on the increase.
Although tax inspections can also be performed for the VAT carried forward;
no assessment can be made as a result of
inspection for the years in which tax base had been increased.
2.4. Other Arrangements Regarding Base and Tax
Increase
The application for the tax base and tax increases
summarized above must be made until 31 August 2021.
Increasing the tax base and tax does not prevent the
implementation of the provisions of the Tax Procedure Law regarding the
preservation and presentation of legal books and documents.
The tax base or tax increase does not constitute an
obstacle to the tax inspections that were started before the Law was published.
However, in case the tax inspections initiated for the taxpayers who applied to
the tax base and tax increase cannot be concluded until 02.08.2021, then these inspections
will not be continued. Pre-assessment settlement requests regarding tax inspections concluded
within this period will not be considered.
In the event that a base or tax base difference is
determined as a result of inspection, the tax difference found as a result of
the inspection will be evaluated together with the provisions regarding tax
increase.
No stamp tax will be charged for tax returns to be
submitted by taxpayers due to tax base or tax increase.
3.Correction of Records
In accordance with the law; it is possible to correct
cash balances and receivables from shareholders’ that are recorded in accounts
as of 31.12.2020 but do not physically exist in the company, provided that a 3%
tax is paid over the relevant balances.
Taxes paid within the scope of the specified article
cannot be deducted from income and corporate taxes, and they will not be
considered as expenses in determining the tax base.
Additionally, inventory that is recorded as of
31.12.2020 but do not physically exist can be corrected by drawing up invoices
and performing other tax-related obligations.
In the invoices to be issued, the gross profit rate
determined according to the current year records for the same type of
commodities, the fair market values to be determined by them or the
professional organization to which they are affiliated will be taken into
account in terms of machinery, equipment and fixtures.
For goods, machinery, equipment and fixtures that are
not included in the records although they are present in the enterprise; it is
possible to record them over the fair market value determined by taxpayers or
professional organizations.
During the aforementioned correction process, a
reduced-rate (half-rate) value added tax shall be declared and paid. This tax
paid on machinery, equipment and fixtures cannot be deducted from the
calculated value added tax.
4. Common Provisions Regarding Regulations
4.1. Payments to be made under the Law
It is possible to pay the amounts that are payable
within the scope of amnesty in a single installment, or in 6 to 18 installments
that elapse to a period of 12 to 36 months subject to an inflationary
adjustment (coefficient).
In case all the taxes accrued as a result of the tax
base or tax increase are paid in advance within the first installment payment
period, a 10% discount will be applied over such payables.
If case entire amount of tax restructured are paid in within
the first installment payment period, then no coefficient will not be applied
and a discount at 90% of the amounts to be calculated based on the D-PPI,
instead of late-payment interest, shall be applied.
It is also possible to pay the amounts calculated
within the framework of the law in installments, and taxpayers will be able to
choose one of the installment options specified in the table below during the
application. Payments in installments will be made in two-month periods, and
interest will be applied by taking into account the coefficients specified in
the table. Those who apply to benefit from the provisions of the law will be
given a payment schedule for the installment period they prefer.
Number of Installments |
Duration of payment (Month) |
Applicable Coefficient |
6 |
12 |
1,09 |
9 |
18 |
1,135 |
12 |
24 |
1,18 |
18 |
36 |
1,27 |
4.2. Application
Those who wish to benefit from the provision of the
law must apply to the relevant authority until 31.08.2021.
5. Revaluation of fixed assets
Within the framework of the amendment made in the
temporary article 31 of the Tax Procedure Law, the fixed assets and immovables can
be subject to revaluation until 31.12.2021. After revaluation, a tax at the
rate of 2% shall be calculated over the increase in the value. The declaration
of the tax shall be made until the end of the month following the date of the
revaluation. The first installment will be paid within the period of filing the
declaration, and the following installments will be paid in the second and
fourth months following the filing period.
6. Enforcement of Law
The above summarized articles of the Law No. 7326
entered into force on 09.06.2021, the publication date of the Law.
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