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| Duran Bülbül |
Turkey has introduced three different tax amnesties in the
past decade. The last one was introduced within the "public
debts programme" in 2016. This time, the Turkish government
declared a new tax amnesty to restructure public debts in early
May.
The draft law aims to reduce the tax burden of the private
sector and increase the collection of public receivables. As in
previous tax amnesties, the draft law also allows taxpayers to
pay their public debts through instalments. However, the draft
law does not cover the principal taxes but their
auxiliaries.
The scope of the draft law
The draft law, which principally restructures defined tax
debts and some public receivables, was proposed by the members
of the Turkish Parliament on May 4 2015.
Under the draft law, the scope of the new restructuring
programme for public receivables contains the following:
- Individual and corporate taxes, tax
penalties, default interest and late payment interest
regulated under the Turkish Tax Procedure Code and related to
tax periods earlier than March 31 2017 (except for the
advance individual and corporate income taxes of 2017 and
second instalment of individual income taxes to be paid in
2017);
- Customs duties and their tax penalties,
default interest and late payment interest and administrative
penalties related to the periods earlier than March 31
2017;
- Social security premiums and other social
security payments (unemployment contribution premiums)
related to the periods earlier than March 2017; and
- Public receivables within the Law on
Municipal Revenues (including all sort of default interest,
late payment interest and administrative penalties).
On the other hand, some of the other public receivables
included in the draft law are as follows:
- Public receivables under the Law on
Regulation of Public Financing and Debts;
- Based on the respective law, stamp tax,
special transaction tax, contribution to education fee and
their late payment interest related to tax periods earlier
than March 31 2017; and
- Public receivables (including all sort of
default interest, late payment interest and administrative
penalties) within the Law on Special Provincial
Administrations regulated under the Turkish Tax Procedure
Code and related to tax periods earlier than March 31
2017.
Restructuring of definitive public receivables
Provided that the unpaid amount of taxes and public
receivables and the amount computed on the "Domestic Production
Price Index (YI-UFE)" are together paid in the stated terms and
way, it will be possible that the public debts of taxpayers are
restructured.
Within this framework, default interest, late payment
interest, tax penalties relating to original tax, and late
payment interest relating to tax or administrative penalties,
are not to be collected if one opts to apply for the
restructuring programme.
Eventually, the draft law will enable, from the point of
taxation, taxpayers to pay their public debts by either cash or
instalments (starting from six months to 144 months of equal
instalments) by restructuring tax and public debt claims that
are difficult to collect.
Therefore, we believe that taxpayers that have difficulty in
paying their taxes and public debts or would like to benefit
from the law should apply for the programme during the upcoming
period.
Duran Bülbül (duranbulbul@gazi.edu.tr),
of counsel, Centrum Consulting
Gazi University, Faculty of Economics and Administrative
Sciences, Department of Public Finance
Tel: +90 312 216 1349
Website: www.centrumauditing.com