Tax Loss Penalty (VUK art. 341-344): Calculation and Objection

Turkish Tax Code numbered 213 articles 341-344 regulates the misdemeanor of "tax loss": It is applied in cases where "the taxpayer or the person responsible prevents the accrual of the tax or ensures the unfair refund of the tax"

Types of Tax Loss

• General loss (Art. 344): Accrual of tax less than its actual amount.
• Smuggling (VUK art. 359): Forged documents, book falsification, smuggling nature.
• Participation (VUK art. 360): Those who help.

Penalty Calculation

• Tax loss penalty (Art. 344): 1 times the lost tax.
• Smuggling (Art. 359): 3 times the tax loss + 18 months-3 years imprisonment.
• Remorse (Art. 371): If it is added to the relevant period declaration, the penalty is reduced to 20%.

Repentance Institution (VUK art. 371)

• The taxpayer must make additions to the declaration before the examination/inspection by the administration begins.
• The penalty is reduced by 80% (that is, to 20%).
• It is made together with the interest payment.
• Tax privacy is protected.

Method of Reconciliation (VUK article 379)

• Reconciliation with the administration regarding the tax penalty.
• Conciliation before assessment.
• Post-assessment reconciliation.
• 75-80% reduction in penalty is normal.
• If a compromise is reached, the right to sue is waived.

Lawsuit

• Cancellation case in the tax court within 30 days.
• Request for stay of execution.
• Rights of appeal.
• Administrative action and litigation are options; A lawsuit cannot be filed after reconciliation.

4th Chamber of the Council of State — Established Approach

The 4th Chamber of the Council of State seeks the determination of the "true nature of the incident" in the tax loss files, the drawing of the smuggling-loss line with concrete evidence, and the administration's proof of "intention" claim; It adopts that mere lack of documentation cannot be considered intentional smuggling.

Penal Dimension — VUK art.359

Acts that constitute smuggling require imprisonment:

• Editing/using fake documents.
• Book falsification, concealment.
• Do not fake registration.
• 18 months-3 years imprisonment + fine.
• Manager responsibility in a legal entity.

Practical Tips