26.07.2022/55
Obligation to Prove Transactions with Foreigners and Non-Resident Individuals in Turkey
In paragraph (2) of the first paragraph of Article 257 of the Tax Procedure Law No. 213, the Ministry of Finance was granted the authority to impose an obligation on taxpayers to prove their transactions related to collections and payments through documents issued by banks, similar financial institutions, or postal authorities. The Ministry is also responsible for determining the scope, procedures, and principles regarding this obligation.
In order to prevent informality in financial records, the requirement to prove collections and payments was introduced, and the General Communiqué No. 459 of the Tax Procedure Law was published in the Official Gazette No. 29572 on 24/12/2015.
As stated in the mentioned communiqué, those subject to the proof requirement are obligated to make collections and payments exceeding 7,000 TL with intermediary financial institutions and prove these transactions with the documents issued by these institutions.
This includes:
– Collections and payments related to any goods delivery or service provision,
– Collections and payments made in the form of advances, deposits, or similar,
– Collections and payments made by businesses with their own shareholders and/or other individuals or legal entities,
if the specified amount is exceeded, must be made through intermediary financial institutions, and these transactions must be proven with documents issued by the said institutions.
The section titled “4.2. Collections and Payments Not Subject to the Requirement” of the communiqué lists transactions that are not required to be made through intermediary financial institutions.
With the publication of General Communiqué No. 540 of the Tax Procedure Law in the Official Gazette No. 31901 on 23/07/2022, collections and payments related to transactions with foreigners and/or non-resident individuals in Turkey have been added to the scope of transactions subject to the proof requirement.
Thus, for transactions with foreigners and/or non-resident individuals in Turkey, the following conditions must be met in order for the proof requirement to be waived:
– The passport number of these individuals must be written on the issued invoices,
– Cash collections must be proved with documents issued by intermediary financial institutions by the end of the first business day following the collection.
You can access the 459th General Communiqué of the Tax Procedure Law here.
You can access the 540th General Communiqué of the Tax Procedure Law here.
Best regards,
BİLGENER
