“Taxpayers with CPA Certification in due time cannot be placed on Special Principles if they use forged documents”
With the publication of Communique No. 46 in the Official Gazette dated 01.04.2023, amendments have been made to the sections of the General Application Communique on Value Added Tax (VAT) that regulate “Those Found to Use Fake Documents” (IV/E-3.5) and “Those Found to Use Misleading Documents in Terms of Content” (IV/E-4.5).
Special Rules Regulation
As is known, the special rules regulation aims to prevent the VAT refund of amounts that have not been transferred to the Treasury and/or were created fictitiously without a real transaction basis, by determining whether the refunded VAT amount is legitimate.
In this context, taxpayers found to have used fake or misleading documents are included under special rules, and VAT refund procedures are carried out accordingly.
Sometimes, even if the purchases are real, taxpayers may be found to have used fake or misleading documents. This usually occurs when a report is prepared stating that the person or company from whom the purchase was made is involved in issuing fake documents. In such cases, even small amounts of identified issues may lead to taxpayers being placed under special rules.
To prevent this, amendments have been made to the sections of the General Application Communique on Value Added Tax mentioned above. According to these changes, taxpayers with a full audit agreement for the year in which the period containing the negative determination regarding the use of fake or misleading documents has been made, will not be included under special rules if the amount indicated in the fake or misleading document does not exceed 5% of their total purchases in the same period.
Effect of the Regulation on the Invitation to Explanation Procedure
On the other hand, it has been stated that the regulation will not affect the invitation to explanation procedure, which is part of the preliminary determinations under Article 370(b) of the Tax Procedure Law (VUK) and the application of special rules based on such determinations.
The invitation to explanation procedure allows taxpayers to provide explanations for preliminary determinations made by the relevant authorities indicating that tax loss has occurred, before the tax inspection starts or before being referred to the assessment commission.
While the invitation to explanation procedure cannot be used for crimes listed in Article 359 of the VUK, which includes the use of fake documents, it is stated that the amount indicated in the fake or misleading documents will be subject to this procedure if it does not exceed 100,000 Turkish Liras (320,000 TL from 01.01.2023) in a calendar year, or even if it exceeds this amount, it does not exceed 5% of the total goods and services purchases of the relevant year.
In this regard, taxpayers with a full audit agreement for the period in which the fake or misleading document is identified, will not be included under special rules if the amount shown in the document does not exceed 5% of their total purchases for the same period. However, they may still be subject to the invitation to explanation procedure and the application of special rules accordingly.
You can access the relevant Communique here.
Sincerely,
BİLGENER
