03.04.2023/48
It Has Been Made Possible to Fulfill VAT Refund Requests from Services Subject to Partial Withholding Tax with an Independent Auditor Report, If a Timely Full Audit Agreement is Available.
With the publication of Circular No. 46 in the Official Gazette No. 32150 dated 01.04.2023, changes were made in the section of the General VAT Application Circular that regulates “Withholding Tax Procedures for VAT Refund Claims” (I/C-2.1.5.2.1.) and the section that regulates “Cash VAT Refund Claims” (I/C-2.1.5.2.2.).
As it is known:
- Cleaning, garden, and landscaping services,
- Repairs, maintenance, and service of machinery, equipment, fixed assets, and vehicles,
- All types of catering services and organizational services,
- Studies, planning, consulting, auditing, and similar services,
- Outsourced textile and garment work, outsourced shoe and bag making, and intermediary services for outsourcing,
- Building inspection services,
- Transport services,
- All types of printing and publication services,
- Commercial advertising services,
- Labor force supply services,
- Customer finding/bringing services for tourist shops,
these services are subject to partial withholding tax, and refund claims exceeding 10,000 TRY for these services were previously fulfilled with a tax audit report.
Cash refund claims for these services were fulfilled exclusively with a guarantee or a tax audit report, and if the entire refund request was guaranteed, the guarantee would be resolved based on the result of the tax audit report.
With the amendments made by Circular No. 46, from now on, if a timely full audit agreement exists for the year in which the taxpayer performed the transaction that gives rise to the refund right, offset VAT refund claims related to these services can be fulfilled with an Independent Auditor Report (YMM report).
Similarly, if a timely full audit agreement exists for the year in which the taxpayer performed the transaction giving rise to the refund right, cash refund claims for these services can be fulfilled with an Independent Auditor Report (YMM report), or the guarantee provided for the full refund claim can be resolved with the YMM report.
You can access the relevant Circular here.
Sincerely,
BİLGENER
