Can the loss resulting from the inflation adjustment in 2023 be deducted from the 2024 income?
Financial statements dated 31/12/2023 are subject to inflation adjustment regardless of whether the conditions for inflation adjustment are met. The profit/loss difference resulting from the inflation adjustment made is shown in the profit/loss account of previous years. The previous year profit determined in this way is not subject to tax, and the previous year loss is not considered as loss.
Inflation adjustment has been made for the balance sheet at the end of 2023.
The tax declaration in the 2023 corporate tax return was made according to the income statement prepared before the inflation adjustment, and the amount of financial profit or loss carried over to the next year was reached from the commercial profit before the inflation adjustment (e.d.). The financial loss before e.d. reported in the return and the losses that can be deducted from previous years at the top of the return can be deducted in 2024 and the following years.
After inflation adjustment, the losses of the previous years from the 570 or 580 omnibus accounts, where the accounts specified in the VUK 555 Communiqué are collected, will not be deducted from the income of the years 2024 and thereafter.
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Tax Procedure Law Communiqué No. 555;
Correction process
ARTICLE 12- (1) Taxpayers within the scope;
a) The balance sheet for the end of the 2023 accounting period will be prepared without considering the provisions regarding inflation adjustment.
b) Inflation adjustment will be made for the balance sheet for the end of the 2023 accounting period and the tax base for the 2023 accounting period will be calculated based on the profits determined according to the financial statements before the adjustment.
c) The balance sheet prepared at the end of the 2023 accounting period will be subject to inflation adjustment in any case.
(2) According to subparagraph (7) of paragraph (A) of Article 298 of Law No. 213;
a) If the inflation adjustment conditions reoccur after an accounting period for which inflation adjustment is not applied, inflation adjustment will be made starting from the last period for which inflation adjustment is made.
b) Previous year profits determined in this way are not subject to tax, and previous year losses are not considered as losses. However, in determining the tax base, previous year financial losses are taken into account with their recorded values.
c) Accumulated depreciations are adjusted by taking into account the increase rate that occurs after the adjustment in the value of the asset they belong to on the balance sheet date.
ç) Inflation difference accounts of passive items arising from these transactions are subject to tax in this period, if they are transferred to another account or withdrawn from the enterprise in any way, without being associated with the profit of the periods in which these transactions are made. However, inflation differences belonging to equity items can be offset against previous year losses resulting from the adjustment or added to the capital by corporate taxpayers; these transactions are not considered as profit distribution.
In addition, the profit/loss difference arising from the inflation adjustment of the balance sheet at the end of the 2023 accounting period is shown in the previous year profit/loss account. Previous year profits determined in this way are not subject to tax, and previous year losses are not considered as losses.
(3) Correction of the balance sheet for the end of the 2023 accounting period shall be made within the framework of the provisions of paragraph (A) of Article 298 of Law No. 213, the provisions of temporary Article 33 and the procedures and principles determined in this Communiqué.
(4) Since the tax base for the 2023 accounting period must be determined according to the pre-correction financial tables, the depreciation expense for the 2023 accounting period will also be calculated based on the values before inflation adjustment.
Source: Tax Procedure Law Communiqué No. 555
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