VAT Circular No. KDV-70/2023-1 of 2 March 2023, published by the Revenue Administration, extends the export deadlines for goods supplied under the deferral-cancellation regime.
Explanations have been provided in VAT Circular No. KDV-70/2023-1 of 2 March 2023, published by the Revenue Administration.
1. Introduction:
The subject of the Circular is the extension, because of the earthquake disaster that occurred in Kahramanmaraş on 6 February 2023, of the export deadlines for goods supplied under the deferral-cancellation regime set out in Article 11/1-c of Law No. 3065.
2. Extension of the deadlines:
As is known, under Article 11/1-c of Law No. 3065, value added tax on goods supplied to exporters by manufacturers on condition that they be exported is not paid by the exporters; that tax, which is not collected by taxpayers but is declared in the return for the relevant period, is assessed and accrued by the tax office and deferred. Where the goods are exported within three months from the beginning of the month following the date of supply to the exporter, the deferred tax is cancelled.
On the other hand, where the export cannot be carried out within three months because of force majeure or unforeseen circumstances, an additional period of up to three months may be granted to exporters who apply within 15 days of the expiry of the three-month period at the latest.
The second paragraph of the same article empowers the Ministry of Treasury and Finance to determine the procedures and principles governing the application of the exemption.
Accordingly, for taxpayers registered as at the date of the earthquake in the places where force majeure was declared because of the earthquake, and whose three-month period beginning from the start of the month following the date of the supply recorded for export ends between 6 February 2023 and 31 July 2023 (inclusive), it has been considered appropriate to treat that period as extended by a further three months under force majeure, without any application to the tax office for an additional period. Taxpayers whose export period expired earlier but whose 15-day period for requesting an additional period for carrying out the export falls within that period will be treated in the same way.
For taxpayers who previously obtained an additional period of less than three months because of force majeure or unforeseen circumstances, where the date on which that additional period expires falls between 6 February 2023 and 31 July 2023 (inclusive), it has been considered appropriate for that additional period to be completed to three months without any further application.
For example, goods supplied in the January 2023 period by manufacturer (A), recorded for export, to exporter (B), a taxpayer of the Adıyaman Tax Office Directorate, were not exported within the deadline (by 30 April 2023). If exporter (B) carries out the export by 31 July 2023 without applying to the tax office for an additional period, it is possible to benefit from the deferral-cancellation regime.
Similarly, where exporter (C), a taxpayer of the Aksu Tax Office Directorate, which had previously obtained a one-month additional period until 31 January 2023 because of unforeseen circumstances, is unable to carry out the export within that period, the export period will be extended to 31 March 2023 under force majeure, without any further application.