Payment Requirement for VAT Refunds Arising from Withholding Tax withholding is Abolished
In the 15th article of the Communiqué on Amendments to the VAT General Implementation Communiqué (Serial No: 35) published in the Official Gazette dated 16.02.2021 and numbered 31397, the phrase “condition is not sought” in the second paragraph of the section (I / C-2.1.5.1.) of the same communiqué has been changed as “is required”. This regulation entered into force on 01.03.2021.
While it was previously sufficient for the buyers to have declared the withheld VAT, this Communiqué stipulates that the buyers must have paid the withheld VAT to the tax offices as of 01.03.2021.
However, the relevant regulation was subject to litigation on the grounds that it was unlawful.
In the General Letter dated 13.05.2022 dated 13.05.2022 and numbered E-64994458-130[5509-815]-63230 written by the Revenue Administration, the Fourth Chamber of the Council of State decided on 01.02.2022 dated 01.02.2022 and with the decision of the Fourth Chamber of the Council of State dated 01.02.2022 and numbered 2021/2647, the execution of Article 15 of the Communiqué on the Amendment of the VAT General Implementation Communiqué (Serial No: 35) has been suspended, and it has been informed that the condition that the VAT declared and accrued by the buyer with the VAT Declaration No.2 has been paid will not be sought from the taxpayer in the fulfillment of the refund requests arising from the withholding application.
According to the same General Letter, regarding the refund requests within the scope of withholding, the tax offices will investigate whether the VAT withheld by the buyers has been transferred to the Treasury and will take action without delay in terms of the follow-up and collection of the taxes determined not to be transferred to the Treasury.
Thus, sellers who request VAT refunds within the scope of withholding will not have problems in their refunds due to buyers who do not pay the withheld VAT to the tax office. In addition, taxes declared withheld but not paid will be monitored by the Revenue Administration.
Sincerely,
BİLGENER
