Turkish Tax Administration
Samsun Tax Office
Taxpayer Services Group Directorate
Date: 02/03/2016 Number: 97338759-105[2015-04]-29 Subject: Bookkeeping Approval in Case of Inheritance and Continuation of Business
We have examined your application regarding the continuation of your deceased father’s business activities, who was keeping books based on the balance sheet method until … (date). You have requested our opinion on whether you should have your own books approved from the start date until 31.12.20.., and which books you should have approved for the new period of 01.01.20… – 31.12.20…
Article 164 of the Tax Procedure Law states, “Death is considered a cessation of business. The deceased’s heirs who have not renounced the inheritance must notify the tax office. If any of the heirs notifies the death, the other heirs are relieved of this obligation.”
On the other hand, the Internal General Communiqué No. 2001/1 states; “…if the heirs continue the same business uninterruptedly after the death of the testator, the date of death is considered the cessation of business for the testator and the commencement of business for the heirs. If the heirs who continue the business notify within one month following the date of death, the notification is considered to have been made on time, and the tax liabilities of the heirs are established as of the date of death of the testator. Furthermore, pursuant to the authority granted by Article 257 of the Tax Procedure Law, it has been deemed appropriate for the heirs who continue the business to use the existing books and documents of the testator until the end of the accounting period that includes the date of death. In this case, the accounts related to the testator’s activities must be closed as of the date of death, and the accounts of the continuing heirs must be reopened. In addition, it is natural that the continuing heirs have their own books approved for the new accounting period within the last month of the relevant accounting period and use their documents by having them printed by contracted printing houses or certified by a notary in accordance with the procedures.”
On the other hand, Article 179 of the aforementioned Law sets forth the conditions for the transition from the first class to the second class and from the second class to the first class, stipulating that the class change shall take effect as of the accounting period following the fulfillment of these conditions.
Accordingly,
- Due to your continuation of business in the workplace transferred through inheritance, you are required to use the existing books and documents until the end of the accounting period that includes the date of death.
- Taking into account Article 179 of the Tax Procedure Law, you need to specify the book you will keep in the 20… calendar year according to your business volume from the beginning of your tax liability until 31.12.20…
Source: Revenue Administration
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.
