Page 12 - VEGU_Haziran_2018

Vergide Gündem
English Translation

One more debt restructuring…

The Law (no.7143) containing the restructuring of public debts particularly the
tax debts has been enacted following its publication on May 18. It’s a widely
comprehensive law not only including debt reduction but also tax base and tax
increase, correction of operational entries and wealth amnesty. In this article,
we’ll be dealing with the regulations of the aforementioned law concerning the
restructuring of taxpayers’ specified tax debts.
Receivables within the scope

The scope of restructuring covers tax debts relating to the periods prior to 31
March 2018 and taxes within the returns submitted until that date. Also, it would
be appropriate to remind that taxes accrued before 31 March 2018 concerning the
year 2018 are within the scope, as well.

The law covers not only the taxes indicated above but also the tax penalties, interest
for delay and late fee linked to all these taxes. However, the advance taxes that
should be paid in 2018, second instalment of the income tax concerning 2017 and
the second instalment of motor vehicles tax for 2018 do not exist within the scope
of the restructuring.
In addition to the taxes mentioned above, taxes collected by the municipalities
notably the real estate tax and service charges are within the scope of the
restructuring, as well.

Some part of the interest will be written off
Any deduction cannot be made over primary taxes among the debts unpaid as
of May 18 despite matured liability. The taxpayers claiming for restructuring
are required to pay the whole primary tax amount in any case. Tax penalties
issued according to the primary tax (such as the tax loss penalty) are written off
completely. The receivables as delay interest and late fee will also be cancelled,
but instead of them an interest to be calculated over the primary tax by taking the
domestic PPI index monthly change rates until the law’s date of publication as basis
should be paid. Namely, if we sum up, debts are being restructured through paying
the primary tax and domestic PPI difference.
Half of the irregularity fine

Also the half of tax penalties (irregularity and special irregularity fines) issued
regardless of the primary tax which are unpaid as of May 18 despite matured
liability are written off. It will be possible to get rid of this debt by paying the
amount to be calculated by taking the domestic PPI index monthly change rates
until May 18 as basis instead of late fee for the remaining half and this amount.

Time of application
The law indicates that application should be submitted until the end of second
month following the law’s publication date. Accordingly, taxpayers intending to
benefit from the restructuring are required to apply until the end of July.

However, we would like to remind that the terms for application and first instalment
may be extended up to one month by the Council of Ministers.

12 Haziran 2018