Our Information Note on the Tax Procedure Law General Communiqué No. 518 adopted in the fight against COVID-19 has been published.

1. INTRODUCTION

As stated in our previous information note on the subject, in the press conference following the coordination meeting on the coronavirus epidemic (the “COVID-19 epidemic”) held on 18 March 2020, President Recep Tayyip Erdoğan announced the introduction of an economic stimulus package consisting of 19 measures. One of the actions contained in such package refers to a regulation on the 6-month postponement of tax payments of tax payers active in certain sectors. The regulation anticipated in this context has now been published in the Official Gazette (repeating issue) dated 24 March 2020 and numbered 31078, in the form of the Tax Procedure Law General Communiqué No. 518 (the “Communiqué”) which introduces provisions on how tax payers will be able to rely on the force majeure provision of the Tax Procedure Law No. 213[1].

2. THE COMMUNIQÉ’S REGULATIONS
   
   
   
   
   1. Tax payers falling within the scope of force majeure
   
   
   
   

While article 13 of the Tax Procedure Law No. 213 describes force majeure events, article 15 of the same Law provides that the Ministry of Treasury and Finance is authorised to declare a state of force majeure in regions, cities, districts and locations, as well as in relation to certain groups, affected by events deemed to constitute force majeure and to determine a tax payment waiver in respect of such areas and groups for the duration of the force majeure event. The Tax Procedure Law No. 213 further provides that the Ministry of Treasury and Finance is further entitled to postpone the payment date of any tax, penalty and default interest and taxes that have been accrued on the basis tax declarations as stated in article 15 of the same Law for a maximum period of up to 1 year as of the due date of such payments.

Relying on such authority vested in it, the Ministry of Treasury and Finance has announced that the following tax payer groups will be considered within the relevant force majeure provisions within the period between 1 April 2020 and 30 June 2020 (such dates being inclusive) as per article 3 of the Communiqué:

• tax payers required to pay income tax with regard to any commercial, agricultural and professional revenue;


• tax payers directly affected by the COVID-19 epidemic and whose main area of activity relate to retail, including shopping centres, health services, furniture manufacturing, the iron, steel and metal industry, mining and quarries, building construction services, industrial kitchen manufacturing, automotive manufacturing and trade and the manufacturing of parts and accessories for the automotive industry, logistics and transportation services including car rentals and storage services, artistic services such cinema and theatres, publication activities of books, newspapers, magazines and similar printed materials, including printing services, accommodation activities including tour operators and travel agencies, food and drinks services, including restaurants and coffee houses, textile and garment manufacturing and trade and event and organisation services, including public relations; and


• tax payers whose main area of activity is with respect to those workplaces that have temporarily been closed on the basis of the measures adopted by the Ministry for Internal Affairs. 

When determining the relevant areas of activity as described above, the main activity code registered in the records of the relevant tax office as of the publication date of the Communiqué will be taken into account. However, even if such registered main activity code is different from the code of the abovementioned main activities, whether the relevant tax payer will be eligible to benefit from the force majeure provisions will be evaluated on the basis of its actual, de facto area of activity, provided that the tax payer is able to prove and certify that its actual main area of activity is within the exempted group of activities.

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   2. The postponement of tax payments
   
   
   
   

Tax payers considered to fall within the scope of force majeure are foreseen to benefit from the following periods:

• The submission date of withholding and value added tax declarations (including withholding and tax premium declarations) required to be submitted in the months of April, May and June have been extended until the end of day of 27 July 2020.


• The payment date of taxes accrued on the basis of withholding and value added tax declarations (including withholding and tax premium declarations) submitted in the months of April, May and June have been postponed until the end of day of 27 October 2020, 27 November 2020 and 28 December 2020, respectively.


• The deadline for the submission of the “Form Ba-Bs” declarations[2] required to be submitted in the months of April, May and June has been extended until the end of day of 27 July 2020.


• The deadline for the uploading of the e-books required to be issued and signed and uploaded to the Revenue Administration’s data processing system by the end of the months April, May and June has been extended until the end of day of 27 July 2020.
  
  
  
  3. The declaration of force majeure for tax payers affected by the curfew
  
  
  
  

Tax payers and professionals subject to a curfew introduced as part of the measures adopted by the Ministry for Internal Affairs – i.e. residents who are 65 years of age or older or have a chronic disease - and whose declarations are submitted via such professionals on the basis of the “Intermediary and Liability Agreement” in force at the date of the Communiqué’s publication date will be deemed to benefit from force majeure during the period between 22 March 2020 and the date on which the curfew will be terminated.

The deadline for the submission of the tax declarations of the abovementioned tax payers and the payment of any tax accrued on the basis of such declarations has been extended until the end of day of the date falling 15 days after the date on which the curfew is terminated.

The extension for the submission of tax declarations and the payment of relevant taxes for  tax payers of 65 years of age or older will take place ex officio, meaning that such extension does not require an application by the relevant tax payer.

However, any extension for the submission of tax declarations and the payment of relevant taxes for reasons of a chronic disease depends on the presentation of valid documentation obtained from healthcare facilities as to the existence of such disease. Such extensions will be effected upon the written application of the tax payer including the submission of the relevant chronic disease documentation via the electronic interactive tax office. The relevant documentation obtained from healthcare facilities must then be presented to the authorised tax office within the 30-day period following the date on which the curfew is terminated.

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   4. Miscellaneous
   
   
   
   

If the curfew ends prior to 30 June 2020, tax payers benefitting from the force majeure provisions for reasons of age or a chronic disease will be able to benefit from force majeure provisions set out in article 3 of the Communiqué following the end of the curfew, provided that they fall within the scope of such article.

Also, where the income and employment information of employees must be declared in the withholding and tax premium declarations pursuant to the social security legislation, force majeure will be relevant with respect to the postponement of the declaration and payment dates of the tax deductions of such declarations.

3. CONCLUSION

As stated in our previous information note on this subject, the government’s economic stimulus package included certain postponements for tax purposes and reductions in tax rates.[3] These tax measures as described above therefore constitute an additional necessary and important step in light of the efforts to mitigate the adverse effects of the COVID-19 epidemic on tax payers.