16.03.2023/40
VAT Refund Considerations for Areas Declared as Force Majeure
With the publication of the Circular No. 45 in the Official Gazette dated 25.02.2023 and numbered 32115, certain regulations were made regarding the VAT refund requests of taxpayers during the force majeure period declared due to the earthquake, within the scope of the Value Added Tax General Implementation Communique.
As is known, the Ministry of Treasury and Finance previously declared a force majeure in the provinces affected by the earthquake in Kahramanmaraş, namely Adana, Adıyaman, Diyarbakır, Gaziantep, Hatay, Kahramanmaraş, Kilis, Malatya, Osmaniye, Şanlıurfa, and Elazığ, as well as the Gürün district of Sivas.
Accordingly, taxpayers with a registration on 06.02.2023 in the areas declared as force majeure are considered to be in force majeure from 06.02.2023 to 31.07.2023 for the purposes of applying tax laws. During this period, the deadlines for submitting tax returns and notifications have been extended.
According to the aforementioned Circular, whether or not the taxpayers are within the scope of force majeure, they must submit VAT returns and indicate the VAT amounts requested for refund in order to be eligible for a VAT refund.
Set-off Refund Requests
1) For amounts found without any issues as a result of the inquiry by the KDVIRA system and the controls by the tax office, the set-off refund request will be processed according to the general provisions.
2) In case the issue identified in the control report produced by the KDVIRA system is due to the fact that the purchasing taxpayers (including subcontractors) did not submit VAT returns and/or Ba-Bs declarations due to force majeure, the set-off refund of the related part is as follows;
– For taxpayers holding the HİS certificate, 12.5% of this amount,
– For taxpayers holding the ITUS certificate, 25% of this amount,
– For taxpayers without the HİS or ITUS certificate, in the case of a report from a certified public accountant, tax inspection report, or where no collateral is required, 50% of this amount, and 120% of this amount if collateral is provided, will be processed.
3) For amounts found with issues other than force majeure as a result of the inquiry by the KDVIRA system and the controls by the tax office, the set-off request will be evaluated in accordance with the general provisions.
Furthermore, after the force majeure period ends, the VAT refund requests benefiting from these regulations will be re-checked through the KDVIRA system, and reports will be produced. Taxpayers’ refund requests for the periods within the scope of force majeure will be concluded by tax offices according to general provisions, considering these reports.
Cash Refund Requests
1) For amounts found without any issues as a result of the inquiry by the KDVIRA system and the controls by the tax office, the cash refund request will be processed according to the general provisions.
2) In case the issue identified in the control report produced by the KDVIRA system is due to the fact that the purchasing taxpayers (including subcontractors) did not submit VAT returns and/or Ba-Bs declarations due to force majeure, the cash refund of the related part is as follows;
– For taxpayers holding the HİS certificate, 30% of this amount,
– For taxpayers holding the ITUS certificate, 60% of this amount,
– For taxpayers without the HİS or ITUS certificate, in the case of a report from a certified public accountant, tax inspection report, or where collateral is provided, 120% of this amount will be processed.
3) For amounts found with issues other than force majeure as a result of the inquiry by the KDVIRA system and the controls by the tax office, the cash refund request will be evaluated in accordance with the general provisions.
You can access the relevant Circular here.
Best regards,
BİLGENER
