What are the current updates on tax regulations in Turkey? Our Tax Partner Serhat Umut Aydın explained

As it is known, the Law No. 7326 on the “Restructuring of Certain Receivables and Amending Some Laws” entered into force on 03 June 2021.

Among the institutions enacted by this law, the below are present:

  • eliminating the tax audit (tax inspection) risks of the past fiscal periods for which the taxpayers voluntarily increase the tax bases,
  • in some cases, termination of the tax audits of the taxpayers who have entered into tax audits,
  • restructuring of debts at the stage of tax audit and assessment,
  • the declaration of undeclared incomes and earnings without penalty and interest by declaration with regret,
  • restructuring of ongoing tax debts coming from the previous laws for debt restructurings,
  • discounts of up to 90% if tax disputes can be settled with a mutual agreement,
  • restructuring the unpaid debts to the tax administration and to the Social Security Institution with low interest rates and providing the opportunity to pay in installments,
  • making business records compatible with the real situation without penalty and interest,
  • approximation to the real situation by re-evaluating the values ​​of immovables and some other economic assets registered in the assets,

In Turkey, the sui-generis tax institutions named as “voluntary tax base increase” and “tax debt restructuring” have come into force several times before and attract a great deal of attention in the periods they are implemented. The legislator aims to collect some doubtful tax receivables quickly and to reduce the workload of the tax administration by putting these institutions into practice in certain periods. In addition, it can be said that taxpayers like the institution of “voluntary tax base increase” so much, which can also be described as a type of “tax audit insurance” in order to neutralize the unforeseen situations and risks that may arise in the tax inspection. In addition, the taxpayers avoid a significant financial burden as they will have the opportunity to pay their unpaid tax debts with low interest rates.

In order to benefit from the provisions of the said law, the application deadline is September 30, 2021, and the down payments resulting from this law must be made as of October 31, 2021. We need to express that taxpayers should be extremely careful about the payment schedule, since the advantages of the law cannot be benefited if the promised payment schedule is not complied with.

Murat Solakoğlu