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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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