Revenue Administration issues statement on SCT for toys

In a statement released on its website, the GİB noted that some social media posts and press commentary today indicated a misunderstanding regarding the "Draft Law on Amendments to the Law on Certain Regulations Regarding the Defense Industry and Other Laws," which was submitted to the Grand National Assembly of Turkey's Planning and Budget Committee yesterday, specifically concerning the inclusion of items commonly known as "drones" under the scope of the Special Consumption Tax (SCT).

The statement, which included the phrase "There is no SCT on toys," provided the following information:

"With Article 10 of the draft law referred to the Planning and Budget Committee yesterday, the phrase that must be written with the Customs Tariff Statistical Position (GTİP) number (9503.00) as it appears in international definitions for what the public knows as 'drones'—which is the name defining the item's heading—is as follows:

'Tricycles, scooters, pedal cars and similar wheeled toys; dolls' carriages; dolls; other toys; reduced-size (scale) models and similar recreational models, working or not; puzzles of all kinds'

This is the name of the item; the part that is actually brought under the scope of the tax is the section written in parentheses thereafter: '(Only flying toys designed solely for recreational purposes, which are included in the customs tariff statistical position numbers 9503.00.75.00.00; 9503.00.79.00.00).')

The statement noted that because the law was misread in press commentary and social media posts, assessments were made and messages were shared suggesting that taxes were being imposed on children's toys such as tricycles, scooters, pedal cars, and dolls based solely on the name of the item. The following was recorded:

"Since the SCT Law brings items defined by GTİP under the scope of taxation, when it is not intended to bring the entire item listed in the annex of the current legislation under the scope of taxation, the name of the item and the part actually being taxed are narrowed down, and this narrowing is determined by the terms 'only' or 'solely.' In summary, it is incorrect to interpret the phrases that must be written as the item's name due to legislative drafting techniques as if a tax is being imposed on that item based solely on its name without looking at its content. Therefore, claims that SCT will be collected on toys such as tricycles, dolls, and pedal cars do not reflect the truth."