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Vergide Gündem
English Translation
All that remain after the VAT reform…
The draft law containing radical changes in Value Added Tax (VAT) Law also called
as the “VAT reform” had been submitted to the Turkish Grand National Assembly at
the end of February. The Law no.7104 was published in the Official Gazette dated
6 April 2018 following its approval in the General Assembly with the removal of its
certain arrangements from the text.
Deferred VAT is not refunded!
The VAT Law contains a provision indicating that the deferred VAT would not be
refunded except some specific circumstances particularly for exports. The total
amount of deferred VAT, deemed to be a sort of receivable from the government is
pronounced at about TL 160 billion.
The draft law which was submitted to the Grand National Assembly contained
regulations allowing the refund of deferred VAT amounts to the taxpayers. Despite
the different perceptions within the public opinion, of course a complete refund at
one time was not possible. It was indicated that a certain portion of that amount
would be refunded by considering the budgetary opportunities and through
handling inspections.
However, regulations concerning the refund of deferred VAT have been removed
from the Law’s text during the negotiations at the General Assembly.
Group VAT liability cancelled
A regulation authorizing the Ministry of Finance to permit group companies
for assigning a single VAT liability under certain terms was also existing within
the draft. That provision has been removed from the Law’s text at the General
Assembly, as well.
No interest payment on late refund
One of the most essential regulations was the provision requiring an interest
payment, even at a rate of deferment interest to the taxpayer in the circumstance
that the VAT had been refunded late. That was removed from the Law during the
negotiations at the General Assembly, too.
Period for VAT deduction extended
Pertaining to the existing implementation, taxpayers are able to deduct the VAT on
the documents issued for themselves within the period that they were entered into
the books provided that the calendar year in which the taxable event occurred is not
exceeded. By the new Law, a facility has been introduced to use that deduction right
until the end of the calendar year following the calendar year in which the taxable
event occurred. However, this will not be enacted immediately. It will be effective
from 1 January 2019.
Time limit on claims for VAT refund
Regarding the VAT incurred for the refundable transactions such as exports and
could not be compensated through deduction; the requirement of claiming it until
8 Mayıs 2018