Tax Procedure Law General Communiqué No. 571 on the increase of tax penalties was published in Official Gazette No. 32697 of 19 October 2024.
Tax Procedure Law General Communiqué No. 571 on the increase of tax penalties was published in Official Gazette No. 32697 of 19 October 2024.
Law No. 7524, published on 2 August 2024, amended Articles 352, 353, 355 and repeated 355 of the Tax Procedure Law to provide for the tax loss penalty imposed on those operating outside the records to be increased by 50%, for irregularity and special irregularity penalties to be increased significantly, and for certain acts to be brought within the scope of the penalties.
This Communiqué sets out explanations on those provisions.
Increased tax loss penalty for unregistered activity
Under the amendment to Article 344 of the Tax Procedure Law, the tax loss penalty imposed on taxpayers who carry on activity without registering and thereby cause a loss of tax will be increased by fifty per cent.
Accordingly, for taxpayers who derive income from unregistered activity and cause a loss of tax by keeping those activities and income outside the knowledge of the tax office, tax loss penalties will be applied with a 50% increase from 2 August 2024, the date of publication of Law No. 7524.
Furthermore, even where activity is subsequently carried on with tax office registration, the same increase will apply where a new assessment is made at a later date for the same tax type and taxation period in respect of the periods of unregistered activity.
Increased special irregularity penalties
Law No. 7524 amended Article 353 of the Tax Procedure Law governing special irregularity penalties, and added Schedule (2), shown in the table below, providing for special irregularity penalties to be applied at increasing amounts for each finding.
The explanations and examples in the Communiqué cover, in summary, the following points:
- For failure to issue an invoice, a special irregularity penalty of 10% of the amount that should have been entered on the invoice, and not less than TRY 10,000 per invoice, must be imposed on the taxpayer. Likewise, a special irregularity penalty determined according to the position of the purchaser will be imposed on those who do not obtain these documents.
- Where the purchaser notifies the administration, in the nature of a report, within 5 business days following the period in which the invoice should have been issued and in any event before the matter comes to the administration’s knowledge, the special irregularity penalty to be imposed on the taxpayer will be applied at three times the normal amount.
- Where a second finding of failure to issue an invoice is made against a taxpayer within the same calendar year, a special irregularity penalty of three times the amount calculated as 10% of the amount that should have been entered on the invoice, and not less than TRY 60,000 (three times the TRY 20,000 in Schedule (2) annexed to the Law), will be imposed. If the purchaser required to obtain an invoice notifies the tax office within 5 business days, no special irregularity penalty will be imposed on the purchaser.
- Where documents outside the scope of the Tax Procedure Law are issued instead of an invoice, the penalties will be applied at twice the normal amount.
- Where the obligations to issue and obtain invoices are not met, penalties will be applied separately to both the seller and the purchaser.
- On a first finding of failure to issue a payment recording device receipt, a special irregularity penalty of TRY 10,000 will be imposed on the taxpayer for each invoice not issued. On a second finding, a special irregularity penalty of three times TRY 20,000 (TRY 60,000) will be imposed on the taxpayer for a single receipt.
- A special irregularity penalty of TRY 5,000 will also be imposed on final consumers who do not obtain a payment recording device receipt.
- A special irregularity penalty of TRY 5,000 will likewise be imposed where a final consumer does not notify the tax office within five business days of a failure to issue an invoice.
Incomplete notification of listing information in digital environments
Under the amendment to the first paragraph of repeated Article 355 of the Tax Procedure Law, the special irregularity penalty applicable where those subject to an obligation to provide information about advertising, listing, sale and leasing activities in digital environments fail to make the notification, or make it incompletely or misleadingly, has been redetermined.
Accordingly, a special irregularity penalty will be imposed separately for each item of information and other obligation not notified, or notified incompletely or misleadingly. The upper limit of the special irregularity penalty for those acts will be assessed by reference to the total amount of the penalty to be imposed for each notification.
Accordingly, a special irregularity penalty of TRY 20,000 will be imposed on a taxpayer who fulfils the notification obligation incompletely, separately for each item of listing information not notified or notified incompletely. If the penalty to be imposed for listing information not notified exceeds the upper limit in the article, the special irregularity penalty will be applied at the upper limit of TRY 10 million.
Reduction of penalties and settlement
It is provided that where the taxpayer or the person responsible for the tax applies to the relevant tax office within 30 days of service of the notices and states that they will pay the tax or tax difference assessed additionally, ex officio or by the administration, together with half of the tax loss, irregularity and special irregularity penalties, on the due date or within three months of the due date by providing collateral, half of the penalty imposed will be reduced. In addition, for irregularity and special irregularity penalties not exceeding TRY 23,000 for 2024, that reduction rate will be applied at 75%.
Taxpayers on whom a tax loss penalty has been imposed (excluding penalties imposed where the loss of tax was caused by the acts described in Article 359 of Law No. 213, penalties imposed on those participating in those acts, and penalties imposed under Article 370 on taxpayers served with a preliminary finding notice under paragraph (b) of that article), and taxpayers on whom irregularity and special irregularity penalties exceeding TRY 23,000 for 2024 have been imposed, may request settlement within 30 days of service of the tax/penalty notice.