Information

DOCUMENTATION REQUIREMENT FOR PURCHASES OF GOODS OR SERVICES OVER 7,000 TL

(It has been prepared by taking into account the changes made with the Tax Procedure Law General Communiqué No. 572 published on October 18, 2024.)

Those Within the Scope of Documentation Requirement

-Self-Employed

-First and Second Class Traders

-Farmers Keeping Books

-Those Whose Earnings Are Determined by Simple Method

-Tradesmen Exempt from Tax

-Those Who Are Not Taxpayers (Including Final Consumers)

Scope and Amount of Documentation Requirement

Those within the scope of documentation requirement, including final consumers, shall make their collections and payments for all kinds of goods or services over 7,000 TL through intermediary financial institutions and they are required to document these collections and payments with documents issued by the relevant institutions.

Collections and payments regarding motor vehicles and motor vehicle rental services subject to registration by those engaged in vehicle rental activities must be documented with documents issued by intermediary financial institutions, regardless of the 7,000 lira limit.

Non-taxpayers, including consumers, are not required to document the transactions they will make among themselves.

Intermediary Financial Institutions

-Banks

-Payment institutions authorized under the Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions

-Postal and Telegraph Organization Joint Stock Company

Documentation in Installment Transactions

If the total amount of the goods or services exceeds 7,000 liras, each collection and payment must be made through intermediary financial institutions, even if the installment amounts are below this limit.

Collections and Payments Made with the Same Person or Institutions on the Same Day

If the total amount of transactions made with the same person or institutions on the same day exceeds 7,000 liras, even if each transaction is below the limit determined on a transaction basis, the collection and payments subject to the transaction must be made through intermediary financial institutions starting from the transaction it exceeds.

Punishment Application
For each of those who do not comply with the obligation to document, in 2024 for each transaction;

-First class merchants (balance sheet basis) and freelancers shall be subject to a special irregularity penalty of not less than 20,000 TL,

-Second class merchants (business account basis), farmers who keep books and those whose earnings are determined by the simple method shall be subject to a special irregularity penalty of not less than 10,000 TL,

-For those other than those listed above, not less than 5,000 TL,

10% of the amount subject to the transaction shall be subject to a special irregularity penalty.

EXAMPLE:

The final consumer (A) purchased a gold bracelet worth 25,000 TL from the jeweler and paid the entire amount in cash.

10% of the amount subject to the transaction (25,000 TL X 0.10) = 2,500 TL

In this case, since 2,500 TL is below the minimum penalty amounts determined for 2024, a special irregularity penalty shall be subject to a special irregularity penalty.

*To the final consumer: 5,000 TL

*To the seller

-Balance Sheet Basis 20,000 TL

-Business Account Basis 10,000 TL

Source: Revenue Administration – https://www.gib.gov.tr/sites/default/files/fileadmin/haberler/tevzor_infografik.pdf
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.

Date: 03/05/2011
Subject: Whether the rent paid by an individual can be deducted as an expense by the company after the company is established

In the private ruling request mentioned, it is stated that a shop was rented by the 51% shareholder and director of your company on 01.11.2009, a year’s rent was paid into the shop owner’s bank account on 06.11.2009, and during this period, your shareholder had no commercial activities or tax registration. However, renovation work on the rented shop began on 03.02.2010, and your company was established on the same date. It is also mentioned that, with an additional protocol to the existing rental contract, the rental status in the name of your shareholder was transferred to your company. In this context, you requested our opinion on whether a withholding tax declaration should be filed for the rent for the period between 01.11.2009 and 01.11.2010 and whether the rent already paid can be written off as an expense on behalf of the company.

In Article 1 of the Corporate Tax Law No. 5520 titled “Scope of Tax,” it is stipulated that capital companies are corporate taxpayers and their earnings are subject to corporate tax.

On the other hand, in Article 8 of the Tax Procedure Law No. 213, “A taxpayer is a natural or legal person who is liable to pay tax according to tax laws. A tax responsible person is a natural or legal person who is liable for the payment of taxes and acts as a representative to the tax office. Unless otherwise provided by tax laws, special contracts regarding tax liability are not binding on tax offices. The term ‘taxpayer’ in the following articles of this law also includes tax responsible persons.”

Additionally, every individual and legal entity in the Republic of Turkey is assigned a tax identification number. The Ministry of Finance is authorized to determine the procedures and principles for the implementation of this provision and to make it mandatory to use the tax number in records and documents related to transactions carried out by public institutions, organizations, and real and legal persons.

According to the Turkish Commercial Code, companies acquire legal personality upon registration in the trade registry. A company can only have rights between the date it acquires legal personality and the date its registration is deleted from the trade registry.

Therefore, for the rented business premise rented by your shareholder between 01.11.2009 and 01.11.2010, it is possible to deduct the rent payments made for the period after the company was established and became a party to the rental agreement (from 08.02.2010 to 01.10.2010) as an expense in determining corporate earnings. Additionally, withholding tax must be applied on these rent payments in accordance with Article 94/1(5/a) of the Income Tax Law. However, it is not possible to deduct the rent payments for the periods before the rental agreement was transferred to your company as an expense.

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.

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.

(2) Residents in Türkiye cannot decide on the contract price and other payment obligations arising from these contracts in foreign currency or indexed to foreign currency in real estate rental contracts that are subject to real estate located in Türkiye, including residences and roofed workplaces.

(3) In real estate sales and rental contracts to which residents of Türkiye who do not have citizenship ties with the Republic of Türkiye or the persons specified in the nineteenth paragraph of this article are parties as buyers or tenants, it is possible to decide on the contract price and other payment obligations arising from these contracts in foreign currency or indexed to foreign currency.

Source: Istanbul Chamber of Certified Public Accountants
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.

1- What is severance pay?

If the employee leaves the job without complying with the notice requirement, or if the employer terminates the employee’s contract without adhering to the notice requirement, the compensation paid based on the duration of employment is called severance pay.

2- Who is entitled to severance pay?

Employees working under an indefinite-term employment contract can receive severance pay. Employees under a fixed-term employment contract are not entitled to severance pay.

3- What are the notice periods?

Employment contracts are deemed terminated:

a) After two weeks from the date of notification to the other party, for employees who have worked less than six months.

b) After four weeks from the date of notification to the other party, for employees who have worked between six months and one and a half years.

c) After six weeks from the date of notification to the other party, for employees who have worked between one and a half years and three years.

d) After eight weeks from the date of notification to the other party, for employees who have worked more than three years.

4- Can notice periods be extended?

The notice periods are minimums and can be extended by contract.

Example: The Labor Law No. 4857 stipulates a two-week notice period or severance pay for employees who have worked up to six months. Parties may agree to extend this period to three weeks or more.

5- Does the employee pay severance to the employer, or does the employer pay it to the employee?

If the employer terminates the employee without a valid reason and without providing notice, the employer pays severance to the employee. Similarly, if the employee leaves without valid reason and without notice, the employee pays severance to the employer.

6- Are there deductions from severance pay?

Income tax and stamp duty are deducted from severance pay. However, insurance premiums and unemployment insurance premiums are not deducted.

7- Which wages are taken into account when paying severance?

In calculating severance pay, in addition to the wage specified in the first paragraph of Article 32 of the Labor Law No. 4857, other monetary or contractually obligated benefits provided to the employee are also taken into account. Payments considered in the calculation of severance are also considered in severance pay.

8- What issues are not considered valid reasons for termination?

The following are not valid reasons for termination:

a) Union membership or participating in union activities outside working hours or with the employer’s consent during working hours.

b) Serving as a workplace union representative.

c) Filing complaints with administrative or judicial authorities to pursue rights derived from law or contract, or participating in such processes.

d) Reasons such as race, color, gender, marital status, family responsibilities, pregnancy, childbirth, religion, political opinion, and similar reasons.

e) Not attending work during periods when it is prohibited for female workers to work under Article 74.

f) Temporary absenteeism due to illness or accident within the waiting period stipulated in Section 25(1)(b).

9- What rules must be followed when terminating an employee’s contract under job security?

The employer must provide the termination notice in writing and clearly and definitively state the reason for termination.

The indefinite-term employment contract cannot be terminated based on the employee’s conduct or performance without giving the employee a chance to defend themselves.

10- What is the time limit for filing a lawsuit against a termination notice?

An employee whose contract has been terminated may file a lawsuit with the labor court within one month from the date of notification, claiming that no reason was provided, or that the reason given was not valid.

11- If the court rules for reinstatement, how soon must the employee apply to return to work?

The employee must apply to the employer within ten working days from the date of notification of the final court decision.

12- What happens if the employee does not return to work after the court’s reinstatement decision?

If the employee does not apply within the prescribed period, the termination made by the employer is deemed valid, and the employer is only liable for the legal consequences.

13- How long does the employer have to implement the court’s reinstatement decision?

If the court or private arbitrator determines that the termination is invalid, the employer must reinstate the employee within one month.

14- What happens if the employer does not reinstate the employee despite the court’s decision?

If the employer does not reinstate the employee within one month, the employer must pay compensation equal to at least four months’ and up to eight months’ wages and all other entitlements for up to four months until the court ruling.

15- Are prior payments deducted if the employee returns to work following reinstatement?

If the reinstated employee returns to work, the wages for the notice period and severance paid in advance are deducted from the payments due. If the employee is not reinstated and no notice period or payment in lieu of notice was provided, the wage for these periods must also be paid.

16- Are other rights beyond wages paid during the four-month period?

In addition to wages, any other entitlements accrued during the four-month period following reinstatement must also be paid.

Example: If the employee receives fuel assistance or bonuses every three months, these must also be paid to the reinstated employee.

17- Are insurance premiums paid for the four-month period counted as worked time?

Whether the employee is reinstated or not, insurance premiums, including short-term insurance and unemployment insurance, must be deducted for up to four months of unpaid time, which is also counted as worked time.

18- Can delay interest be applied to the four-month wage?

Delay interest may be applied to the four-month wage from the date the invalidity of the termination is finalized.

___________________ / _______________________

Account 770 General Administrative Expenses

770.02 Severance Pay

Account 360 Taxes Payable

360.01 Income Tax: 420 TL

360.02 Stamp Duty: 21.25 TL

Account 335 Liabilities to Personnel

Severance Pay Accrual Record

___________________ / _______________________

Source: Istanbul Chamber of Certified Public Accountants
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.

If the company is liable to stamp duty, it will be declared in the following month with the stamp duty declaration for the date on which the lease contract is issued.

If the company is not liable to stamp duty, it will be declared within 15 days with the stamp duty declaration to the affiliated tax office.

Source: Istanbul Chamber of Certified Public Accountants
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.

According to Article (11/1-a) of Law No. 3065, services provided for customers abroad are exempt from tax.

2.1. Scope of Exemption

In order for a service to be exempt from VAT within the scope of Article (11/1-a) of Law No. 3065, according to Article (12/2) of the same Law;
– The service must be provided for a customer abroad,
– The service must be utilized abroad,

The fact that the service is provided for a customer abroad is documented with an invoice or similar document issued in the name of the customer abroad.

The purpose of using the service abroad is that the service provided in Turkey for the customer abroad is related to the customer’s business, transactions and activities abroad; it is not related to their activities in Turkey.

Since the goods and services that companies abroad will send to Turkey are consumed in Turkey, consultancy, brokerage, supervision, customer finding, market research, etc. services provided to these companies in Turkey for the goods and services in question are not considered within the scope of service export exemption and are subject to VAT. In this case, in determining the benefit criterion, the service provided must be directly related to the imported goods.

Services provided for goods imported by foreign companies from Turkey (exported by Turkey) are considered within the scope of service export.

Modification, maintenance, and repair services provided to foreign-flagged ships and aircraft that do not have the right to transport within Turkey are exempt from VAT within the scope of service export.

Services provided from Turkey to free zones are not considered within the scope of service export.

2.2. Documentation and Declaration of Exemption

The exception regarding service export is documented with a service invoice issued to the customer abroad. A list showing photocopies or printouts of service invoices approved by company officials is provided. These documents must be submitted as an attachment to a petition within the declaration period in the period in which the exemption is declared. It is not mandatory to provide the payment document for the service (a document proving that the amount was brought to Turkey, bank receipt, etc.) for the declaration of the exemption.

The export exemption is declared with the VAT Declaration No. 1 for the taxation period in which the service was performed. The declaration is made by using the transaction type line number 302 in the “Transactions Included in the Scope of Full Exemption” table in the “Exemptions-Other Transactions Giving Right to Refund” tab of the declaration for the period in which the service performed for the customer abroad was completed/performed.

The service fee is entered in the “Delivery and Service Amount” column of this line. The VAT amount calculated by taking into account the explanations in Section (IV/A) of the Communiqué, which is included in this service, is written in the “Incurred VAT” column. If no refund is requested, “0” is written in the “Incurred VAT” field.

The refund of VAT incurred for transactions declared in this manner and not compensated through deduction is not fulfilled before the service fee arrives in Turkey in foreign currency. However, in service exports shown in Turkish Lira on the invoice, refunds can also be made based on documents proving that the fee was brought to Turkey in Turkish Lira.10

However, in modification, maintenance and repair services of foreign flagged ships that do not have the right to transport within Turkey, 50% of the VAT incurred due to the service within the scope of the exception and not compensated through deduction is refunded without the need for a document proving that the service fee was brought to Turkey. The remaining portion of the VAT to be refunded is refunded at the rate that half of the transaction fee was brought to Turkey.

2.3. Refund

The following documents are required for refund requests arising from service export:
– Standard refund request petition
– Service invoice or list
– Payment document (a document proving that the price was brought to Turkey, bank receipt, etc.)
– List of VAT to be deducted for the period in which the service export was declared
– List of VAT incurred
– Calculation Table of VAT Requested to be Refunded

2.3.1. Refund by Setoff

Taxpayers’ refund requests arising from service export and not exceeding 10,000 TL are fulfilled without requiring an inspection report, Certified Public Accountant report, or collateral. If the refund request exceeds 10,000 TL, the refund of the exceeding part is fulfilled according to the tax inspection report or Certified Public Accountant certification report. If a collateral is provided, the taxpayer’s refund request is fulfilled and the collateral is resolved according to the results of the tax inspection report or Certified Public Accountant report.

2.3.2. Cash Refund

Regardless of the amount, taxpayers’ cash refund requests arising from service exports are fulfilled according to the tax audit report or CPA report13. If a guarantee is given, the taxpayer’s refund request is fulfilled and the guarantee is resolved according to the results of the tax audit report or CPA report.

Source:https://www.gib.gov.tr/fileadmin/mevzuatek/kdvgeneluygulamatebligi/kdvgeneluygulamatebligi_2a.pdf
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.

1) e-SMM

Gross: 1,000 TL

Withholding Tax 20%: 200 TL

Net: 800 TL

VAT 20%: 200 TL

Amount to be Collected: 1,000 TL

—-

2) Sales invoice in the nature of a reflection invoice to be issued to another company

Base: 1,000 TL

VAT 20%: 200 TL

Grand Total: 1,200 TL

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.

…

Termination of Contract

Article 26 – (Amended:O.G-21/11/2007-26707)

The parties may terminate the contract between themselves at any time for justified reasons or with their mutual consent.

In this case, the books and documents received shall be returned to their owners within one month by preparing a handover report. If the handover does not take place, the situation shall be notified to the chamber by the professional.

The parties’ rights to compensation are subject to general law rules.

Failure to pay the fee and the documents entrusted to the professional are not reliable and sound are the professional’s legitimate grounds for termination.

Storage and Return of Books and Documents

Article 27 – Professionals are obliged to preserve the books and documents entrusted to them in good faith for the period required by their work and to return them at the end of the work. However, in cases where the return of books and documents is notified to the owner in writing, the storage obligation ends within one month from the date of notification. Books and documents not received by their owners within one month from the end of the work are delivered to the tax office to which the relevant parties are affiliated with a letter.

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.

In addition, taking into account all criteria such as the job description of the employee to whom the advance payment is made, transactions that harm the company and create treasury losses should also be evaluated in terms of hidden profit distribution through transfer pricing and in accordance with other laws.

Source: Istanbul Chamber of Certified Public Accountants
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.