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10June2021

Tax Amnesty and Tax Reconstruction Law has been Published

Tax Amnesty and Tax Reconstruction Law has been Published

The Law regarding Tax Amnesty and Tax Reconstruction has been published with the Official Gazette numbered 31506 and dated 09.06.2021.

The scope of this Law can be summarized as below:

  • Specified receivable (Article 2)
  • Outstanding receivable or receivables in the lawsuit phase (Article 3)
  • Transactions in the investigation phase (Article 4)
  • Tax Amnesty (Article 5)
  • Correction of the company bookings (Article 6)
  • Specified Social Security Institution receivables (Article 7)
  • Outstanding administrative fines and employment premium amounts in the investigation phase (Article 8)

The common statements per the 9th Article and the other related articles in the Law can be summarized as below:

  • The receivables that are applicable before 30.04.2021 are within the scope of this Law.
  • Per the 9th Article; the deadline for the applications to the related official authorities is 31.08.2021.
  • In the 5th Article, the tax amnesty rates are included. Per that article, the tax bases would need to be increased per year with the rates; 35% for 2016, 30% for 2017, 25% for 2018, 20% for 2019, 15% for 2020. Also, the minimum tax bases to be declared for tax amnesty are included in detail in Article 5/b.
  • The payment deadline is 30.09.2021 for the first instalments to be done to the Ministry of Finance, Ministry of Trade, municipalities, provincial administrations, Investment Monitoring and Coordination Department. The first instalment payment deadline for Social Security receivables is 31.10.2021. For the other instalments, the payments would need to be done with two months periods up to a max of 18 instalments.
  • If the payment is fully performed within the deadline of the first instalment, 90% of consumer price index amounts would be deleted. In case that the first instalment is done within the deadline, 50% of consumer price index amounts would be deleted.
  • Per the 9th Article; the applications for the tax amnesty or reconstruction should be done until 31.08.2021.
  • Per the 5th Article; the tax rate for the increased tax bases is 20%. In case that the related tax returns have been submitted and the payments have been performed within the legal deadlines, the tax rate for the increased tax bases would be 15%.
  • Per the 5th Article 5; in case that the taxpayers increase the tax bases and pay the tax amnesty amounts on these tax bases, there would be no inspection/audit with regards to the related years that are applied for tax amnesty.
  • Per the 3rd Article; for the cases as negotiation application, the date for the negotiation could not be received, the negotiation date is awaited, or not completed, tax penalties are not notified; it can be benefited from this Tax Amnesty Law.
  • Per the 9th Article; the payments can be done via 6-9-12-18 instalments.

You can find below the main points with regards to the tax amnesty rules in Law No. 7326:

The Official Related Authorities for the Receivables in the Law:

  • Ministry of Treasury and Finance
  • Ministry of Trade
  • Municipalities
  • Social Security Institution
  • Special Provincial Administrations
  • Investment Monitoring and Coordination Department
  • Municipality Water and Sewerage Administrations

In the 1st Article; the receivables that are within the scope of the Law are listed:

1- The tax and tax penalties within the scope of Law No. 213

  • - The taxes related to the tax returns for the previous periods that need to be submitted before 30.04.2021. Also, the tax penalties related to these taxes.
  • - The taxes related to 2021 and need to be submitted until 30.04.2021. Also, the tax penalties related to these taxes.

2- The Administrative fines that are given before 30.04.2021

The below administrative fines are out of the scope per the 1st Article:

  • The administrative fines per the Public Health Law in Turkey (No. 1593)
  • The administrative fines per Law on the Prevention of Harms of Tobacco Products (No. 4207)
  • The administrative fines per the Public Financial Management and Control Law (No. 5018)

3- The receivables per the Law on Collection of Public Claims (No. 6183)

4- Incorrect declaration of commodities, machinery, equipment, fixed assets as well as petty cash balance and receivables from partners,

5- As per article 1/e; within the scope of Law No. 6183, debts pursued by Social Security Institution and unpaid until the effective date of the related Law or until the due date,

  • - For April, 2021 and earlier months' insurance premiums, pension deduction and institution reserve, unemployment insurance premium, social security support premium, and relevant late penalties and fees,
  • - For April, 2021 and earlier months' voluntary insurance premiums, community insurance premiums, and relevant late penalties and fees,
  • - Insurance premiums calculated as per incorrect labor amount regarding specialized constructions and works subject to tenders, completed until 30.04.2021, and relevant late penalties and fees,
  • - Administrative fines regarding the acts committed until 30.04.2021 and applied in accordance with the relevant laws, and relevant late penalties and fees,
  • - For March, 2018 and earlier months' stamp tax, special transaction tax, contribution to education and relevant late fees,

6- As per Article 1/f; primary and secondary receivables of provincial special administrations, which are pursued within the scope of Law No. 6183, and which have not been paid as of the effective date of the Law, although their due dates are before 30.04.2021,

7- As per Article 1/d; customs taxes, administrative fines, interests, late interests and fees accrued before 30/04/2021, and pursued by the Ministry of Trade in accordance with the Law No. 6183, and within the scope of the Customs Law No. 4458 dated as 27.10.1999,

8- As per article 1/g; municipalities';

  • - In accordance with the 97th recurrent Article of Municipal Income Law No. 2464 dated as 26/05/1981, charge and share receivables and secondary receivables which have not been paid as of the effective date of the Law, although their due dates are before 30.04.2021,
  • - Within the scope of Municipal Law No. 5393 dated as 03.07.2005; water, liquid and solid waste receivables and secondary receivables which have not been paid as of the effective date of the Law, although their due dates are before 30.04.2021,
  • - Within the scope of the Law No. 213, taxes based on declaration and relevant tax penalties, late interests and fees (accrued property taxes and sanitation tax of workplaces are excluded for 2021) applicable for the periods before and after 30/04/2021, and other primary and secondary public receivables pursued within the scope of the Law No. 6183 which have not been paid as of the effective date of the Law,
  • - Solid waste fee receivables (including all kinds of penalties and raises regulated in the contracts) of the metropolitan municipalities, which are due before 30.04.2021 (including this date) according to the 11th article of the Environmental Law No. 2872 dated as 09.08.1983,

9- As per Article 1/ğ; within the scope of the Law No. 2560 dated as 20.11.1981, receivables of water and waste water (including all kinds of penalties and raises regulated in the contracts) which have not been paid as of the effective date of the Law, although their due dates are before 30.04.2021,

10- As per Article 1/h; primary and secondary public receivables of Investment Monitoring and Coordination Directorates which have not been paid as of the effective date of the Law, although their due dates are before 30.04.2021 and pursued within the scope of the Law No. 6183.

In addition, with reference to 11th Article; "The taxpayers, included in the paragraph, can revalue their immovables and financial assets subject to depreciation (except for the immovables and economic assets subject to the sale-lease-repurchase transaction or the issuance of lease certificates), provided that it complies with the scope, terms and provisions until 31.12.2021 as of the effective date of this provision.

As per the 9th Article; "Receivables paid in due time by benefiting from this Law, secondary public receivables such as interest, late fee, delay penalty shall not be calculated for the periods after the publication of the Law."

Again, as per the 9th Article; "In relation to the receivables, the levies applied are removed in proportion to the payments made and the collaterals corresponding to this are returned."

Also, as per certain provisions in the 10th Article; it is observed that debt enforcement proceedings and levy transactions cannot be made for receivables.

Relevant regulations have become effective as of the publication date.

Related announcement of Revenue Administration can be accessed from here.

Related circular can be accessed from here. (In Turkish)

Should you have any queries or need further details, please contact your customer representative.

Written by Selma Kıy, Erdoğdu Onur Erol, Posted in Social Security Law and Legislation, Taxation Law

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About The Authors

Selma Kıy

Certified Public Accountant - SMMM
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