Obligation to Certify: Transactions of Foreigners and Natural Persons Not Residing in Turkey
According to the second paragraph of the first paragraph of Article 257 of the Tax Procedure Law No. 213 of the Income Tax Law, the Ministry of Finance has the authority to request taxpayers to substantiate collection and payment transactions with documents issued by banks, financial institutions, or postal administrations, and it determines the scope and procedures for the implementation of this requirement.
To prevent informal transactions in financial records, the Ministry of Finance has introduced a regulation requiring proof of collection and payment transactions. In this regard, Tax Procedure Law General Communiqué No. 459 was published in the Official Gazette No. 29572 on December 24, 2015.
As stated in the Communiqué, taxpayers subject to the proof requirement must carry out all collections and payments exceeding 7,000 TRY, both those subject to proof and those not subject to proof, through intermediary financial institutions and must substantiate these transactions with documents issued by the relevant institutions.
In this context:
-Collections and payments related to the delivery of goods or provision of services,
-Collections and payments made in the form of advance, deposit, down payment, etc.,
-All collections and payments made by businesses to their shareholders and/or other individuals and legal entities, if the specified threshold is exceeded, must be made through intermediary financial institutions and must be substantiated with documents issued by the relevant institutions.
In the section of the Communiqué titled “4.2. Collections and Payments Not Subject to Proof Requirements,” the collections and payments that do not need to be made through intermediary financial institutions are specified.
When Tax Procedure Law General Communiqué No. 540 was published on July 23, 2022, in the Official Gazette No. 31901, transactions with foreigners or persons residing abroad were also included in the proof requirement scope.
Accordingly, in transactions with foreigners and/or individuals from outside Turkey, the following conditions must be met for the proof requirement to be valid:
-The relevant individuals’ passport numbers must appear on the invoice,
-Cash collections must be substantiated with documents issued by intermediary financial institutions by the end of the first business day following the collection.
You can access the relevant Tax Procedure Law General Communiqué No. 459 here. You can also access the relevant Tax Procedure Law General Communiqué No. 540 here.
Best regards,
BİLGENER
