22February2019

Amendments on 23 and 24 Serial Numbered VAT General Implementation Communiques

“Communique on Amendment to VAT General Application Communique (Serial no 23)” published in the Official Gazette No. 30687, dated 15.02.2019, and “Communique on Amendment to VAT General Application Communique (Serial no 24)” published in the Official Gazette No. 30692, dated 20.02.2019, entered into force upon having been approved by the Ministry of Treasury and Finance.

The amendments introduced by the communiques no. 23 and 24 are as follows:

1- Regarding benefiting from VAT relief, VAT deduction has been made possible by the end of the calendar year following the calendar year in which the taxable event has occurred.

Provided that the documents regarding the goods and service purchases in 2018 are entered in the relevant ledgers no later than 2019, the VAT amounts declared in these documents can be subjected to deduction. Therefore, VAT in the invoices received late may still be subjected to deduction by entering the relevant invoices in the legal ledgers as of 2019 even if a year has passed after the relevant taxable event. Accordingly, the right of the taxpayers to VAT relief has been extended at least for 1 year.

2- The letter of approval provided by the exporter company evidencing that the goods delivered on export basis have been exported shall no longer be required.

With the amendment to the VAT General Application Communique Serial no 23, the letter of approval provided by the exporter company evidencing that the goods delivered on export basis have been exported shall no longer be required if the information of the manufacturer company is provided on the customs declarations.

3- Game software has been included within the scope of VAT exemption.

With the amendment which will take effect on 01.01.2019, game software developed by those, which operate in Technology Development Zones and Specialized Technology Development Zones, in the said zones are also included within the scope of VAT exemption. As of 01.01.2019, VAT incurred from the transactions carried out within the scope of the said exemption can be deducted; however, the VAT that cannot be eliminated by way of deduction shall not be refundable

4- Certain Value Added Taxes, which could not be subjected to deduction previously, can now be deducted from the Value Added Taxes calculated over the taxable transactions of the taxpayer.

VAT which is stated on the purchase documents regarding the transactions exempted from VAT within the scope of the relevant law or which is included in the costs of such goods and services can now be deducted from the VAT calculated over the taxable transactions of the taxpayer.

5- Amendments have been introduced regarding VAT relief for worthless receivables.

In terms of receivables that have become worthless under the law, it has been determined that the VAT that is not paid by the purchaser cannot be deducted from the VAT calculated over the taxable transactions of the taxpayers.

6- In terms of Law No. 30605 ( 17/4-o), it was stipulated that the VAT incurred regarding leasing of duty free shops and the independent units thereof such as storages and warehouses cannot be subjected to deduction.

7- Amendments have been introduced to the application processes for VAT refund.

  • Amendment to the process regarding refund claim for the transactions that are subject to reduced rate.

Upon expiry of the refund claim period, it shall not be possible to claim refund by submitting correction declaration for the previous terms and/or standard refund claim petition and the relevant documents. However, provided that the documents required as per the Communique are submitted within the prescribed period, it will still be possible to complete any missing information in the content of the documents after the expiry of the said period.

  • Amendment to the process regarding refund claim for the transactions within the scope of full exemption

Pursuant to Article 32 of the Law No. 3065, the refund claim must be made by the end of the second calendar year following the period in which the transaction giving rise to tax refund entitlement has been realised.

  • Amendment to the process regarding refund claim for the transactions that are subject to partial withholding

Refund claims regarding transactions that are subject to partial withholding within the scope of the Law No. 3065 must be declared in the refundable VAT section in the relevant period’s returns by the end of the second calendar year following the period in which the relevant transaction has been performed, and the relevant applications for tax refund claims must be submitted to the tax offices latest within this period together with the standard refund claim petition as well as the documents listed in the Communique.

8- 50% of the VAT refund claims shall be refunded to the taxpayers within 10 business days.

With the amendment which will take effect in March, the wording “Refund Practice Based on VAT Refund Preliminary Audit Report” has been added to the section on Refunds Based on the VAT Refund Certification Report of Sworn-In Certified Public Accountants.

Transactions in January 2019 and the subsequent months shall be inquired about by using “KDVİRA” system, provided that all the required documents have been submitted. If there is no non-conformity detected in the refund claims according to the “VAT Refund Preliminary Audit Report” prepared in line with the inquiries, 50% of the portion regarding which no non-conformity has been detected shall be refunded to the taxpayers within “10 business days” following the date of issuance of the report.

  • Taxpayers which submitted VAT Return for a period of minimum 24 moths,
  • Taxpayers which obtained a favourable outcome as to their refund claims in respect of minimum three fiscal periods in the previous processes,
  • Taxpayers which themselves as well as their shareholders, partnerships and legal representatives are not subject to special principles,
  • Taxpayers which are not referred to an examination due to a determination made during the inspections and reviews conducted by the Ministry of Treasury and Finance indicating that they have been involved in forgery of a document.

The taxpayers who meet the above-mentioned conditions shall be able to benefit from the amendment.

You could review full Turkish texts of the communiques from the links below.

Written by Seda Arıcı, Posted in Taxation Law

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About the Author

Seda Arıcı

Legal Consultant | Attorney
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