19.02.2023/33
Partial Withholding Application in Provinces Declared as Force Majeure
Due to the earthquake disaster in Kahramanmaraş, a state of force majeure was declared in the provinces affected by the earthquake, including Adana, Adıyaman, Diyarbakır, Gaziantep, Hatay, Kahramanmaraş, Kilis, Malatya, Osmaniye, Şanlıurfa, and Elazığ (Our Circular No. 09.02.2023/30).
Regarding the state of force majeure, the section titled “Nature of Partial Withholding and Buyers Subject to Withholding” in the General Application Communiqué on Value Added Tax (I/C-2.1.3.1) states:
“According to the Law No. 213, during the period from the date the force majeure begins until the date it ends, the tax obligations of the taxpayers benefiting from the force majeure are deferred. In this context, taxpayers whose declaration obligations have been postponed to a later date, during the period of force majeure, will not be subject to withholding tax on purchases falling under the partial withholding scope. However, if the seller taxpayer is also within the scope of force majeure, withholding tax will continue to be applied on such purchases according to general provisions.”
Based on this regulation:
- Taxpayers registered in the affected provinces as of the date of the earthquake must not apply withholding tax on purchases within the partial withholding scope between 06.02.2023 and 31.07.2023 (inclusive).
- If both parties are located in provinces declared as force majeure, withholding tax will be applied according to general provisions. In this case, the declarations regarding purchases subject to withholding tax must be submitted by the end of Tuesday, 15.08.2023, and the taxes accrued on these declarations must be paid by the end of Thursday, 31.08.2023.
- For purchases made by taxpayers not affected by force majeure from taxpayers affected by force majeure, withholding tax will continue to be applied.
- The above regulation regarding force majeure does not affect the transactions subject to full withholding tax.
Sincerely,
BİLGENER
