The Right to Deduct VAT Paid Due to Protection and Surveillance Practices on Imports has been Abolished
Article 36 of the Value Added Tax Law No. 3065 authorizes the President of the Republic to partially or completely abolish or re-establish the right to discount and to determine the goods or services whose right to discount is restricted in this way, to allow the value added tax that is not claimed for refund within the period and transferred to subsequent periods to be eliminated through discount to be written as an expense in determining the income or corporate tax base, and to determine the minimum amount that can be requested for refund.
With the Presidential Decree No. 7846 published in the Official Gazette dated 24.11.2023 and numbered 32379 pursuant to this authorization;
- Implementation of surveillance on imports In accordance with the relevant legislation, the right to deduct the value added tax paid due to the amounts declared in the customs declarations regarding the goods subject to surveillance practice and which cannot be certified and all kinds of taxes, duties, fees and shares arising from these amounts and included in the value added tax base.
- Implementation of safeguard measures on imports The right to deduct customs duties and/or additional financial obligations imposed as safeguard measures in accordance with the relevant legislation, anti-dumping duties and countervailing duties imposed within the scope of the relevant legislation on the prevention of unfair competition in imports, and value added tax paid due to all kinds of taxes, duties, fees and shares arising from these amounts and included in the value added tax base have been removed.There are various regulations in customs legislation regarding surveillance and protection measures in imports. Additional tax liability may arise on imports subject to these practices. While it was possible to deduct the VAT paid within the scope of these practices before, with the aforementioned Decision, it is no longer possible to deduct the VAT to be paid within this scope.
In accordance with Article 58 of the Value Added Tax Law, VAT that cannot be deducted can be recognized as expense or cost.
The relevant Presidential Decree is available here.
Sincerely,
BİLGENER
