Amendment to VAT communiqué

The Communiqué on Amending the General Application Communiqué on Value Added Tax, prepared by the Ministry of Treasury and Finance, has been published in the Official Gazette.

The communiqué introduces regulations regarding organizations authorized to perform VAT withholding.

A legal regulation had previously been published regarding the state's requirement for tax withholding as part of its fight against the informal economy—in other words, the requirement for the buyer to declare and pay a portion of the VAT that would otherwise be paid to the seller directly to the state in the capacity of a "responsible party." The communiqué provides explanations and examples regarding this matter.

AIMING TO RESOLVE CERTAIN UNCERTAINTIES

While public economic enterprises established by law were already included in the scope of those applying a 5/10 VAT withholding rate on all service purchases not specifically listed in the relevant communiqué, uncertainties existed regarding those not directly established by law. To resolve these uncertainties, public economic institutions and state economic enterprises have now been enabled to perform withholding, just as public economic enterprises do.

On the other hand, the 2,000 lira threshold applied to each transaction in partial withholding practice has been set as the invoice issuance threshold, which is updated annually in accordance with the Tax Procedure Law. The communiqué also includes explanations regarding the calculation method for late payment interest on tax debts when taxpayers request to offset their tax debts against VAT refund receivables within the framework of a court decision.

The communiqué also includes corrections regarding legal regulations made to extend the duration of exemptions contained in temporary articles 20, 29, 32, and 33 of the VAT Law.

The effective date for some articles of the communiqué has been set for today, while for others, it has been set for the beginning of March.

News Source: 12punto