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the end of second calendar year following the period in   and possible penalties together with the taxpayer in the
          which the transaction is made has been introduced. By this   circumstance that the report comes out inaccurate.
          arrangement to be effective from the beginning of 2019, the
          period for claiming VAT refund is apparently indicated in the   Income derived from sale of vehicle registration
          Law.                                                plates of taxis, minibuses

          Time limit for the inspections on VAT refunds       The new Law contains an arrangement on the income tax
                                                              as well. That arrangement is related to the income derived
          While there was an arrangement within the Tax Procedures   from sale of registration plates of taxis, minibuses and public
          Law indicating that it’s essential to finalize the inspection   transportation vehicles.
          within 1 year for the full inspection whereas 6 months for
          limited inspection, such a time limit on VAT refunds did not   As of 6 April 2018, the income derived through those sales
          exist. Through the new Law, a certain inspection period is   will be exempted from income tax regardless of the amount.
          identified for the VAT refund inspections, too. Accordingly,
          the aforementioned inspections should be finalized within 3   Well, then what about the income based on a sale prior to the
          months.                                             publication date of the Law, but not declared? The answer
                                                              to that is just within the new Law. Concerning those sales,
          In the circumstance that the inspection could not be   any tax assessment will not be handled, tax penalty will not
          finalized, it would be possible to claim for additional time.   be assigned regarding the tax inspections or assessment
          This claim for period extension will be assessed by the   procedures. Previous assessments, penalties, lawsuits if any
          relevant department comprising the ones authorized for tax   will be remitted through disclaim.
          inspection and an additional period may be assigned as long
          as it does not exceed 2 months. This latest implementation   Income derived from sales is being removed off the scope
          will be applicable on the inspections handled concerning the   of income tax, however, from now on a fee at a rate of 3 %
          taxation periods following 1 January 2019.          will be applied on the transfer transactions of those vehicle
                                                              registration plates. That fee to be effective from 6 April
          Revenue based taxation                              2018 will be calculated over the transaction value.

          The practice of “revenue based taxation” has been launched   in brief…
          for the tradesmen making entries based on operation
          account and the self-employed. As per that, taxpayer groups   •  Pursuant to the concerning laws, deliveries of brand new
          operating within the sectors and occupations specified by   machinery and equipment performed to be used in R&D,
          the Council of Ministers would be able to declare and pay   innovation and design activities will be exempted from VAT.
          a certain ratio of their revenue without considering the   In the circumstance that the machinery and equipment
          deductible VAT amount if they prefer. The VAT rate to be   subject to full exemption are used with purposes other
          applied will be set by the Council of Ministers provided that it   than the indicated ones or sold out within 3 years as of the
          should not exceed the highest rate.                   start of calendar year following the date of delivery, the
                                                                tax that is not taken at the beginning will be collected from
          For the taxpayers preferring this procedure, VAT paid   the buyer with the late fee by applying tax loss penalty on
          during goods and service purchases will be treated as cost   it. This will be applicable as of 1 June.
          or expense according to the nature of the transaction while
          the VAT that they calculated concerning the deliveries and   •  The Ministry of Finance is authorized for extending the
          services performed will be considered as income. Taxpayers   payment period of the taxpayer entering records based
          preferring this procedure of revenue based taxation which   on the operation account method until the end of the
          will be effective from the beginning of 2019 would not be   second month following the submission of the tax return.
          able to retreat from that before two years.           Accordingly, if the Ministry uses its authority for that from
                                                                the start of 2019, the concerning taxpayers will be able to
          Authorization to Independent Accountant and           pay their taxes one month later.
          Financial Advisors to issue VAT report
                                                              •  The Ministry of Finance is also authorized for presenting an
          The new Law authorizes the Ministry of Finance to let the   opportunity of allowing to write off the deferred VAT that
          Independent Accountant and Financial Advisors (SMMM) for   is not claimed as refund within its period and transferred to
          the issuance of VAT refund report, provided that it’s limited   other periods to be compensated through deduction during
          to the period that they signed tax returns and taxpayers.  the detection of income or corporate tax base. Accordingly,
                                                                deferred VAT amounts that would not be refunded within
          The Ministry has also the authority to set the refund types   the context of regulation which was removed from the
          and maximum refund amounts that are appropriate for   Law’s text will be written off on the occasion that the
          issuing reports as well as the qualifications and requirements   Ministry permits. This provision is taking effect as of the
          for the SMMMs which will issue the reports. Also, the Ministry   Law’s publication date.
          would be able to impose SMMMs for participating in trainings
          and succeed in them.

          According to the regulation enacted as of 6 April 2018, the   This article has been published in the Ekonomist magazine’s
          SMMMs will be jointly and severally be liable for tax loss   issue 2018/14 dated 08.04.2018.

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