Statute of Limitations on Small Payments

Do Small Payments Made By Tax Officials Prevent The Expiration Of Tax Debt?

In tax law, expiration refers to the elimination of tax debt after a certain period of time has passed. There are two types of expiration in tax law: assessment expiration and collection expiration. Assessment expiration is regulated in the Tax Procedure Law No. 213, while collection expiration is covered in the Law on Collection Procedure of Public Receivables No. 6183.

Collection expiration is defined in Article 102 of the Law on Collection Procedure of Public Receivables as follows_: "If a public receivable is not collected within 5 years from the beginning of the calendar year following its due date, it becomes time-barred. The provisions regarding expiration in special laws concerning monetary fines are reserved."

According to this provision, if 5 years have passed from the beginning of the calendar year following the due date of the tax debt, and none of the events that interrupt or suspend expiration have occurred, the tax receivable will become time-barred and cannot be demanded by the collecting authority.

The events that interrupt expiration are regulated in Article 103 of the law. The first event is "payment." If a payment is made within the 5-year expiration period, the expiration is interrupted and starts anew. A genuine payment is required in this context.

Tax officials sometimes make very small payments, such as 1 cent or 1 TL, in order to prevent the expiration of tax debt and continue pursuing the debt. However, these small payments made with the intention of interrupting the collection expiration should not interrupt the expiration. In fact, administrative courts have ruled in this direction, and the Council of State has decided that such payments do not interrupt expiration.

In its decision dated September 25, 2012, Case No. 2010/4340, Judgment No. 2012/3047, the 3rd Chamber of the Council of State stated that "the acceptance that the payment of 1 cent made by the plaintiff is not in accordance with economic reasons and cannot be considered a normal situation according to the ordinary course of life. Therefore, it cannot be claimed that the expiration period was interrupted due to this payment. Considering that there is no circumstance that interrupts the expiration period after the public notification of payment orders and taking into account that the payment orders regarding taxes and penalties that should have been served by December 31, 2008, were served to the plaintiff on December 14, 2009, after the expiration period has expired, it is clear." Similar decisions have been made in many other cases (See: Council of State, 3rd Chamber, March 4, 2019, Case No. 2015/13617, Judgment No. 2019/1485; Council of State, 3rd Chamber, November 29, 2021, Case No. 2018/560, Judgment No. 2021/5684).

In conclusion, very small payments made by the administration or third parties will not interrupt the expiration, and the expiration will proceed in the usual manner from its due date, rendering the debt unenforceable for collection.