December 31, 2022 is the Deadline for Submission of the Country-by-Country Report for the 2021 Accounting Period
1. Transactions within the Full Exemption Scope
According to Article 32 of the Value Added Tax Law No. 3065; the VAT indicated in invoices and similar documents related to the transactions exempted from VAT pursuant to Articles 11, 13, 14, and 15 of the Law and the (s) paragraph of Article 17(4), shall be deducted from the VAT calculated on the taxable transactions of the taxpayer; if there are no taxable transactions or the calculated VAT is less than the deductible VAT, the undeducted VAT shall be refunded by the Ministry of Finance according to the principles determined by the Ministry, upon request, by the end of the second calendar year following the period in which the transaction was performed.
According to the General Application Communique on VAT, VAT refund requests must be made by submitting a VAT refund request letter within two years from the beginning of the year following the year of the exempt transactions; otherwise, VAT taxpayers will lose their right to claim VAT refunds.
Accordingly, taxpayers requesting a refund must fill in the VAT column related to the exemption in the relevant period’s declarations by the end of the second calendar year following the period in which the exempt transaction took place, and must apply to the tax office with the standard refund request letter and the documents listed in the relevant sections of the Communique (including the guarantee for refund requests) within this period. In VAT refund requests made with the VAT Refund Certification Report prepared by an Independent Auditor (YMM), the report must be submitted within six months after the end of the second calendar year following the period in which the exempt transaction took place.
Therefore, VAT refunds for transactions within the full exemption scope for the year 2020 must be requested by 31.12.2022.
2. Transactions Subject to Reduced Rate
On the other hand, according to Article 29/2 of the aforementioned Law, VAT refunds related to deliveries and services for which the President has reduced the tax rate, and the VAT that could not be offset through deduction and exceeds the limit determined by the President, must be requested by the end of the following year.
Accordingly, taxpayers must declare VAT subject to the reduced rate in the relevant VAT returns for the periods from January to November of the year following the year of the reduced rate transaction (including the correction declarations for the January-November periods due by the end of the year), and submit a standard refund request letter and the documents listed in the relevant sections of the Communique to the tax office by the end of the year following the year of the reduced rate transaction.
For VAT refunds requested with the VAT Refund Certification Report prepared by an Independent Auditor (YMM), the report must be submitted within six months after the end of the year following the year of the reduced rate transaction.
Therefore, VAT refund requests related to transactions subject to the reduced rate for the year 2021 must be made by the last day of the VAT declaration period for November 2022, which is 26.12.2022.
Sincerely,
BİLGENER
