Repentance and Reclamation in Tax Law
Repentance and Reclamation in Tax Law
The application of repentance in tax law is regulated in Article 371 of the Tax Procedure Law. With this regulation, it is possible to avoid the penalty of tax loss in taxes (Corporate Tax, Income Tax, Provisional Tax, Income Withholding Tax, VAT, SCT, BITT, Stamp Tax), which are levied and accrued on the basis of declaration, except for real estate tax, if the taxpayers or those who participate in the commission of the acts contrary to the law notify the administration spontaneously with a petition and the missing declarations are completed and payments are made within 15 days from the date of notification.
It should be noted that submitting a declaration with repentance will not prevent the special irregularity penalty to be imposed for the declarations that are not submitted online on time. However, special irregularity penalty will not be imposed in cases where an additional declaration is submitted with a request of repentance after the declaration is submitted within the legal period.
Conditions of Repentance and Reclamation Application
1-Notification was not made before the taxpayer was notified
The first condition for the application of remorse to be valid is that before the taxpayer notifies the administration of the situation, an informant has not been notified by an informant to any official authority with a petition or by certifying the verbal statement with a report.
2- Failure to initiate an examination or refer to the appraisal commission before the notification
The second condition is that before the taxpayer notifies this situation, a tax inspection related to this notified event should not have started or this event should not have been referred to the appreciation commission. It will not be possible to apply repentance after the tax inspection has started. For taxes that are not subject to tax inspection or not referred to an appreciation commission, the opportunity to benefit from repentance continues. For example, if the examination has started in terms of income tax, the right of repentance can be used in terms of value added tax. For petitions sent by registered mail, the day of mailing is accepted as the day of the petition of repentance.
3-Giving the declarations that have never been submitted within fifteen days starting from the date of the taxpayer's notification petition
If the taxpayer has not submitted the tax return before the petition of repentance, he/she must submit it to the administration within 15 days from the date of the petition of repentance. For registered mail, the date of mailing is also taken as basis. The taxpayer may submit the petition of repentance together with the tax return, and it is sufficient for the application of repentance if it is not submitted as a separate petition but stated in writing on the tax return.
If the taxpayer has submitted an incomplete or incorrect tax return, this incomplete or incorrect tax return must be completed or corrected within 15 days from the date of filing the petition of repentance.
4-Payment of the taxes notified by the taxpayer within fifteen days together with the delay interest
The taxpayer who wants to benefit from the repentance must pay the overdue taxes notified by the petition of repentance within fifteen days starting from the date of notification, together with an increase in the rate of delay increase to be applied at the rate specified in Article 51 of the Law No. 6183 for each month and fraction for which the payment is delayed. Partial payments are not accepted. Otherwise, it cannot benefit from the provisions of remorse. In this case, the tax office will impose a tax loss penalty of 50% of the tax in accordance with the third paragraph of Article 344 of the Tax Procedure Law, at the same time, it will remove the repentance increase and calculate default interest instead.
The notified taxes shall be paid in installments on the legal due date, unless the payment is overdue.
It is not possible to submit the declarations given with repentance with a reservation.
It is also possible to apply repentance in the event that the tax base declared does not correspond to the tax due to the declaration of loss or deductions in the declarations submitted with the petition of repentance. Although the tax administration applies contrary practices, the Council of State ruled as follows: "Since it is aimed that the declarations given with repentance will be deemed to have been given on time, it is not possible to go to ex officio appreciation solely on the grounds that the tax base is not declared in the declaration given with repentance." and stated that the failure to declare the tax base in the declarations given with repentance will not constitute an obstacle to the application of repentance (3rd Chamber of the Council of State, T. 14.12.2004 , E. 2004/1339 K. 2004/3158).