Correction of accounting records through tax amnesty (Law no:7440, Article 6) in Turkey. Which accounts? Conditions, benefits, drawbacks?
Three type of corrections in accounting records were specified in the Law, article 6.
(1) Commodities, machinery, equipment that exist in the enterprise but are not included in the records:
- Current value of commodities, machinery, equipment must be determined by companies or the professional organization to which they are affiliated. They can record them in their accounting books by notifying the tax offices with an inventory list within the period specified in the Law (31.05.2023).
- Depreciation is not applied for the assets included in the notification.
- Value added tax is calculated on the basis of half of the rates on machinery, equipment, fixtures and commodities, and declared with a separate tax declaration and paid within the period of filing the declaration (31.05.2023). This tax paid on machinery, equipment can not be deducted from the output value added tax but the tax paid on the commodity is deducted according to the general principles, but is not subject to VAT refund.
- In case of sale of the assets declared within the scope of the law, the sale price cannot be lower than the value recorded in the book.
- Retrospective tax penalty shall not be applied regarding the implementation of this provision
(2) Commodities, machinery, equipment that do not exist in the enterprise although they are in the records:
- Companies should issue invoices including VAT on the basis of the rates on machinery, equipment and commodities, taking into account the current values of machinery and equipment determined by professional organization they are affiliated and commodities determined by them according to the gross profit rate in current year records. In cases where the gross profit rate cannot be determined according to the current year records, the rates determined by the professional chambers to which the taxpayer is affiliated are taken as basis.
- The value added tax to be paid according to this provision is paid in three equal installments, the first installment being at the time of filing the declaration (31.05.2023) and the others in the first and second months following.
- Retrospective tax penalty and delay interest shall not be applied regarding the implementation of this provision
(3) The cash and which is not in the enterprise but in the records and receivables from partners:
- Companies can correct their records by declaring the cash which is not in the enterprise but in the records and net receivables from partners to the tax offices within the period specified in Law (31.05.2023).
- The tax is calculated at the rate of 3% on the amounts declared within the scope of this provision and paid within the period of filing the declaration.
- Taxes paid under this provision shall not be deducted from income or corporate tax; The declared amounts and the taxes paid are not considered as expenses in the determination of the corporate tax base.
- No additional assessment shall be made for the amounts declared pursuant to this provision.