Tax loss penalty

Legal Nature of Tax Loss Penalty

The legal order has included some sanctions against the possibility of violation of the behaviors it orders or prohibits. These sanctions are sometimes encountered as deprivation of liberty or judicial fines, and sometimes as administrative measures. While imprisonment and judicial fines are regulated in the Turkish Penal Code, sanctions for lighter acts other than these are included in the Misdemeanor Law and some special laws.

Misdemeanor refers to the milder forms of acts prohibited by law compared to crimes. The distinction between crimes and misdemeanors in Turkish legislation arose from this point, that is, the severity of the prohibited act, and the sanctions for the two groups of acts were regulated by separate laws. In fact, misdemeanors are considered crimes in a broad sense and constitute the subject of criminal law, but in a narrow sense, due to the crime policy followed in our country, it has become necessary to distinguish between crimes and misdemeanors. The reason why behaviors considered as misdemeanors and the sanctions for these behaviors are included in the law is based on the idea of ​​preventing minor prohibited acts from going unpunished. Therefore, in order for an act to be described as a crime or misdemeanor, it must be checked which law regulates the sanction for that act. As we mentioned above, since misdemeanors can be described as crimes in a broad sense, the principle of legality is also applied to misdemeanors. However, there is some flexibility in the application of the principle of legality in terms of misdemeanors. Namely; Sanctions for misdemeanors, just like crimes, are regulated only by law, allowing the administration to determine the acts that constitute misdemeanors.

The above explanations regarding the distinction between misdemeanors and crimes are included in a limited manner in order to better understand the legal nature of the tax loss penalty, which is the subject of our examination. It should not be forgotten that there are other aspects that differentiate the two groups of verbs from each other. Finally, it should be noted that there is a regulation in the Misdemeanor Law stating that the provisions of the Criminal Code will be applied in cases where there is no provision in this law. In this article, the relationship between crime and misdemeanor is also clearly stated.

The Tax Procedure Law No. 213 differs from the Criminal Code and the Misdemeanor Law in that it is a special law. When the VUK's systematics is examined, it will be seen that both some tax crimes and tax misdemeanors are included. In this respect, VUK contains provisions regarding some areas of both tax law and criminal law. Since taxes constitute the source of income for many countries, it was desired to prevent tax violations and studies were carried out towards this end. With this awareness, some criminal sanctions were included in the Tax Procedure Law, while the Criminal Code existed, and some sanctions related to misdemeanors, while the Misdemeanor Law existed. This practice also causes many violations of rights and is contrary to the principles of criminal law. The regulations made in the Tax Procedure Law, especially in terms of the crime of issuing and using fake invoices and other smuggling crimes, contradict the TCK systematics in many ways. There are also contradictions between VUK and KK. However, in case of a conflict between the special law TPL and other general laws, the dominant view is that the TPL provisions should be applied in practice and doctrine. In this article, we will simply state that we do not agree with this view.

What is Tax Loss?

In light of these general explanations, it should be said that the act of causing tax loss is a tax misdemeanor regulated in Tax Procedure Law No. 213. The law includes two types of misdemeanors: tax loss and irregularity. In this article, only explanations about the tax loss penalty, which constitutes our review topic, will be included.

According to Article 341 of the VUK, "tax loss refers to the tax not being accrued on time or being accrued incompletely due to the taxpayer or responsible party not fulfilling their taxation-related duties on time or incompletely." According to the second paragraph of the same article; "Causing tax to be deficient in accrual or to be refunded unfairly by making false statements about personal, marital or family status or by other means is also considered as tax loss."

As can be understood from the article of the law, tax loss misdemeanor is an optional mobile misdemeanor that can be committed with many actions. What is important is that the action resulted in tax obligations not being fulfilled as required.

ELEMENTS OF TAX LOSS MISMISSION

Motion Element

The material elements of tax loss crime are the action, the result and the causal link between the action and the result. Regardless of the act committed by the misdemeanor, the state must have suffered tax loss as a result of these acts, which shows that the misdemeanor is a material type of misdemeanor. After the act element is listed, the result element will be mentioned under a separate heading below.

Situations that require imposing a tax loss penalty are listed in Article 341 of the Tax Procedure Law. Tax loss according to the article; It refers to the tax not being accrued on time or being accrued incompletely due to the taxpayer or responsible person not fulfilling their taxation-related duties on time or incompletely. The article of the law considers every act that causes tax loss as an element of misdemeanor. In this respect, tax loss misdemeanor is a free-moving type of misdemeanor. Article 344 of the Law is as follows:

"If tax loss is caused in the cases written in Article 341, a tax loss penalty equal to one times the tax lost will be imposed on the taxpayer or responsible person.

In case tax loss is caused by the acts written in Article 359, this penalty is applied three times, and to those who participate in these acts, one fold.

The penalty to be imposed in accordance with this article is applied at a rate of fifty percent for tax returns submitted after the legal period has expired, except for those submitted after the tax audit has begun or has been referred to the assessment commission.

In the article, actions that cause tax loss are regulated in three different groups of acts. These acts will be counted under three headings: light, medium and heavy acts. Light and heavy acts are clearly listed in the law, but there is no legal limitation for moderate acts. The penalty to be applied will vary depending on the severity of the act causing tax loss. In cases specified in Article 359, the tax loss penalty will be aggravated, and in cases of tax returns submitted after the due date and declarations submitted within the scope of an invitation for explanation, the tax loss penalty will be reduced by half.

Accordingly, the acts that constitute tax loss misdemeanor are as follows.

CASES REQUIRING 1-3 TIMES TAX LOSS PENALTY (SERIOUS ACTS)

If the tax loss crime is committed with the acts specified in Article 359 of the TPL, a 3-fold tax loss penalty is imposed on the taxpayer. As it is known, smuggling acts are regulated as crimes. In terms of crimes, trials are conducted by criminal courts and the status of the perpetrator is determined according to the outcome of this trial. However, the TPL has introduced an exception to this rule and has paved the way for a 3-fold tax penalty to be imposed even if the criminal court decides to acquit the perpetrator. This provision is also contradictory to the principles of the rule of law. (VUK 367)

In order for the taxpayer to be punished for serious acts, tax loss must have occurred.

Smuggling acts regulated in Article 359 of the VUK will be listed below. These acts are considered serious acts in terms of tax loss misdemeanor.

a- Making Accounting and Accounting Tricks

Any accounting and accounting fraud requires a 3-fold tax penalty. It is not possible to limit these elephants. There are multiple methods of committing account and accounting fraud. What is important here is the presence of the element of fraud. As a matter of fact, if there are inaccuracies in the accounts and accounting records as a result of an error, this will not require the tax loss penalty to be applied 3 times. The action must be deceptive. Examples of fraud include knowingly making various mathematical mistakes, adding more or less zeros, knowingly recording the wrong account, showing the debt as a receivable, the receivable as a debt, and presenting the sale as a donation.

b- Opening an Account in the Name of Non-Real Persons

In order for this situation to occur, an account must be opened in the name of persons who do not actually exist or who have no connection with the transactions even if they exist. In short, the person in whose name an account is opened must be either fictitious or an unrelated person. This person must be shown as a creditor or debtor with the account opened. An example of this is when a person who is not working in the business is shown to be working.

c- Using Double Notebooks

If the transactions that need to be recorded are recorded in a book other than the mandatory books, double bookkeeping occurs.

ç- Falsifying Books, Records and Documents

This action can only be carried out on books that are required by law to be kept. Falsifying the amount, amount, type, etc. of books and records. It means tampering with the ability to reflect reality by scribbling, erasing, scraping, distorting or changing it. Tax loss must have occurred as a result of the distortion. The falsification must be intentional.

d- Hiding Books and Documents

According to Article 253 of the VUK, those who are obliged to keep books are obliged to keep the books they keep and the documents written in the third part for five years, starting from the calendar year following the year they are relevant. Again, Article 256 of the Tax Procedure Law states that the presentation of these books and documents is mandatory in case of request. In Article 359 of the same law, the act of not submitting books and documents is defined as a crime, and it is also stated that in cases where this act causes tax loss, the taxpayer will be charged 3 times the tax loss in accordance with Article 344. We included explanations about the crime in our article titled The crime of not submitting books and documents. Here we will confine ourselves to making explanations about the conditions for the action to occur.

Article 359 of VUK defines the act of concealment; It is defined as "failure to submit books and documents to persons authorized for tax inspection during the examination, even though their existence is proven by notary certification records or other means."

Then, in the light of the relevant legal articles and high court decisions, the conditions for the act of hiding books and documents can be listed as follows:

•The existence of books and documents must be proven by notary certification records or other means.

•The submission request must be made by those authorized for tax inspection.

• The submission must be requested for the purpose of tax audit and during the tax audit.

• The tax audit must be carried out in accordance with the procedure written in Article 139 of the Tax Procedure Law.

•The submission request must be made within the retention period.

•There must be no justifiable reason given for not submitting books and documents.

e- Issuing and Using Documents That Are Misleading in Terms of Their Content

A document that is misleading in terms of its content, although based on a real transaction, refers to a document in which the nature or amount of this transaction is prepared contrary to reality. This act, like other smuggling crimes, is regulated in Article 359 of the Tax Procedure Law and requires the perpetrator to be sentenced to both tax loss and imprisonment. In the misleading document, what is meant by document is the documents within the scope of VUK. Misleading must exist at the time the document is first drawn up. Here again, it is required that these documents were prepared knowingly. Because in cases of error, there can be no misleading document. As we mentioned, the transaction must be real.

f- Destroying Books and Documents

We mentioned above the retention periods of books and documents. Destroying the books and documents that must be kept according to the Tax Procedure Law within the retention periods determined in accordance with Article 253 of the Tax Procedure Law will constitute both a crime and a tax loss penalty. Destroying books and documents means carrying out completely destructive actions such as burning, tearing and destroying. In short, in order to say that this action has occurred, all or part of the book or document must be made inaccessible.

g- Destroying Notebook Pages

According to Article 278 of the VUK; "In bound notebooks, notebook pages cannot be torn from the binding. In certified movable pages, the order of these pages cannot be disrupted and they cannot be torn." Therefore, the crime of tax loss will be committed by destroying one of the pages of the books that are required to be kept according to the VUK.

h- Issuing or Using Forged Documents

The most common act of smuggling is the act of issuing or using fake documents, also known as nylon invoices. As a matter of fact, the fact that this act is committed so frequently did not escape the notice of the legislator, and this act was punished with one of the heaviest sanctions among tax crimes. At the beginning of the topic, we stated that the sanction of this crime does not comply with the general logic of criminal law. We will give detailed explanations on the subject in our article titled crime of issuing and using fake invoices. Under this heading, the criminal aspect of the action will be examined.

A fake document refers to a document issued between parties with whom there is no real relationship, and in this respect it differs from a misleading document. In a fake document, the parties pretend to have received a good or service from each other, although they did not. In this way, while the user of the document aims to get rid of some tax liabilities, the issuer aims to sell the fake document, usually for a fee.

In practice, the most common purpose of this act is brokerage. Fake invoices can also be issued unilaterally by the user. It can be claimed that completely fictitious purchases were made through these invoices. In practice, certain criteria regarding the falsity of the document have been adopted. Some of these criteria; Payments are made in cash, the company is not present at the workplace, it does not employ insured workers, it does not have any activities, it does not have transportation slips, the company does not pay any taxes, and books and documents are not submitted despite being requested. It is possible to multiply these criteria.

A threefold tax loss penalty will be imposed on the person who issues and uses the fake document. Whether the act of use occurred knowingly or unknowingly has no effect on the punishment.

i- Using Documents Printed by Non-Contracted Printing Houses

Taxpayers can use the documents in which they record their transactions by obtaining them from authorized printing houses determined by the Ministry of Finance or by having them certified by a notary public. Otherwise, there will be a violation of Article 257 of the Tax Procedure Law.

The taxpayer is punished with a 3-fold tax loss penalty for using documents prepared by non-contracted printing houses. But there must be an element of knowledge, that is, intention, here. If the taxpayer uses the document without knowing its nature, he/she will be penalized with a tax loss penalty of 1x.

ACTS THAT REQUIRE 1/2 and 1/5 TAX LOSS PENALTY (LIGHT VERBS)

i- Spontaneous Late Submission of Declaration (VUK 344)

In cases where declarations are submitted spontaneously but late, the penalty to be imposed on the taxpayer is reduced by half. Here, the declaration is required to be submitted by the taxpayer spontaneously, after the legal period but without pressure from the administration. If an investigation has been initiated against the taxpayer or a referral has been made to the investigation commission, the penalty will now be applied in full.

ii- Submission of Declaration within the Scope of Invitation to Explanation (VUK 370)

VUK m. 370

Taxpayers may be invited to explain the preliminary determinations made by the competent authorities indicating that there are signs of tax loss before the tax investigation is initiated or referred to the assessment commission, provided that no notification has been made until the date of determination. Taxpayers to whom a letter of invitation for explanation has been notified cannot benefit from the repentance provisions in Article 371 of this Law, limited to the determination subject to the invitation. If an explanation is made within thirty days from the notification date of the letter inviting explanation, the explanation made is evaluated and the letter containing the evaluation result is notified to the taxpayer.

1. If it is understood by the administration that no tax loss has been caused as a result of the explanation made by the taxpayers, the taxpayers are not subject to tax audit or referred to the assessment commission regarding the determination in question.

2. If the explanation given by the taxpayers is not sufficient, within thirty days from the date of notification of the letter containing the evaluation result; Tax loss penalty is deducted at the rate of 20% on the lost tax, provided that the tax returns that have never been submitted are submitted, the incomplete or incorrect tax declaration is completed or corrected, and the overdue taxes are paid in the same period with an increase in the rate of the delay interest to be applied in the proportion specified in Article 51 of Law No. 6183, for each month and fraction of the payment that is delayed. This situation does not prevent the conduct of a tax audit and, if necessary, the completion of the assessment.

b) If the preliminary determinations made in accordance with paragraph (a) indicate that the tax may have been lost due to the acts included in Article 359 of this Law, taxpayers within this scope are not invited to explain. However, in case of preliminary determinations that the act of using a false or misleading document may have been committed, a letter regarding the preliminary determination may be notified to the taxpayers whose amount of the false or misleading document used does not exceed 109,000 Turkish liras in a calendar year, or even if it exceeds this amount, does not exceed 5% of the total goods and services purchases in the relevant year. Within thirty days from the date of notification of the letter regarding the determination made by the taxpayers; The tax loss penalty is deducted at the rate of 20% on the lost tax, provided that the tax returns that have never been submitted are submitted, the incomplete or incorrect tax declaration is completed or corrected, and the overdue taxes are paid in the same period with an increase in the rate of the delay interest to be applied in the proportion specified in Article 51 of Law No. 6183, for each month and fraction of the payment delay. This situation requires a tax audit and It does not prevent the completion of the assessment, if necessary. Taxpayers who have been notified with a letter regarding the preliminary determination within the scope of this paragraph cannot benefit from the regret provisions in Article 371 of this Law, limited to the determination. The amount in this paragraph is applied every year by increasing it by the revaluation rate determined in accordance with this Law for the previous year.

ACTS THAT REQUIRE 3-1 TIME PUNISHMENT (VERBS OF MEDIUM QUALIFICATION)

Acts that require a 1-fold penalty for tax loss constitute the basic form of the crime. As we mentioned above, these acts are not listed in the law. The law does not only describe actions that specify the result of action. Therefore, when determining these verbs, it is necessary to first look at the light and heavy verb categories. If the act that causes tax loss does not fall into one of the light or heavy act categories, this time it will be considered a medium-quality act and the punishment will be applied accordingly. For example, if the taxpayer does not submit a return at all, it is considered a medium-quality act and requires a 1-fold tax loss penalty.

It is possible to list medium verbs in general terms as follows:

1- Regardless of whether there is an element of intent or not, the tax is not accrued on time or is accrued incompletely due to the taxpayer not fulfilling his taxation-related duties on time or incompletely,

2- Underaccrual of tax due to false statements about personal, marital or family status and other reasons,

3- Causing tax to be refunded unfairly.

CONSEQUENTIAL ELEMENT OF TAX LOSS MISCONDUCT

We mentioned above that tax loss misdemeanor is a type of consequential misdemeanor. Therefore, in order for tax loss to occur, tax loss must have occurred as a result of actions that caused tax loss. Otherwise, no tax loss penalty will be imposed on the taxpayer, regardless of which of the above actions he/she has performed. To explain with an example: If the taxpayer has VAT to be deducted and the transferred VAT is more than the VAT rate that must be declared, the taxpayer's failure to declare VAT does not require a tax loss penalty. Because in this case, there will be no tax loss.

As we have stated in many places, tax loss is the failure to accrue tax on time or its incomplete accrual due to the obligor or responsible party not fulfilling their taxation-related duties on time or incompletely. As clearly stated in Article 341, there must be a disruption in tax accrual due to the taxpayer's action and the state must suffer a tax loss due to this disruption. Again, as stated in the 2nd paragraph of Article 341, causing the tax to be refunded unfairly is also considered as tax loss. Therefore, it will be necessary to divide the resulting element of tax loss crime into two: late or incomplete accrual of tax and unjust refund of tax.

a- Incomplete or Late Accrual of Tax

Vergi ziyaı kabahatinin oluşması için verginin eksik veya geç tahakkuk ettirilmesi neticesinin meydana gelmesi gerekir. Incomplete or late accrual occurs as a result of incomplete or late submission of declarations. Not submitting the declaration or submitting it incompletely is referred to as incomplete accrual, and submitting the declaration after the due date is referred to as late accrual. A margin of deviation of up to 10 percent is allowed in terms of provisional taxes. In other words, understatement of provisional taxes by up to 10 percent is not considered under-accrual.

The moment when tax loss occurs is the moment when the tax is accrued incompletely or late. Accrual according to Article 22 of the Tax Procedure Law; It is defined as a tax that has been assessed and notified reaching a stage where it must be paid. Tax loss is determined according to the date at the accrual stage. If the taxpayer under-accrues the tax, it is considered that a tax loss has occurred and punishment is applied. Mükellefin eksik kısmı sonradan tahakkuk ettirmesi cezalandırılmasının önüne geçmez. Here, it will be necessary to make another explanation, citing the decision No. 2000/2367 K. of the 4th Chamber of the Council of State as an example. If taxes are paid on time, late submission of declarations does not require tax loss penalties. As a matter of fact, this situation is stated in the relevant decision;

"In Article 341 of the Tax Procedure Law No. 213, tax loss is defined as the failure to accrue tax on time or its incomplete accrual due to the taxpayer or responsible person not fulfilling their taxation-related duties on time or incompletely fulfilling them.

The accrual of tax is stated in Article 22 of the said law as a tax that has been assessed and notified reaches a stage where it must be paid, and the collection of the tax is stated in Article 23 as payment within the legal period.

The purpose of tax laws is to ensure collection. For this reason, in the Tax Procedure Law, in the section regarding the determination of tax receivables, it is stated that the tax will be assessed, notified and accrued after the determination of the event giving rise to the tax, and collection, which is the ultimate purpose of all these transactions, is placed last in this order.

The events that give rise to the tax and the remaining transactions during the collection phase are formal and procedural transactions. Failure to perform any of these transactions or their incomplete completion alone is not sufficient to show that a tax loss has been caused. It is expressed as follows: "Whether a tax loss has occurred or not can only be determined if the collection phase cannot be carried out."

b- Unfair Return of Tax

Unjustly giving back the tax constitutes another consequence of tax loss crime. The concepts of unjust return of tax and tax refund are concepts that should not be confused with each other. In the tax refund, the taxpayer has not made any previous payment to the tax office. However, in order for a tax loss to occur due to the refund of the tax, after the taxpayer has paid a certain fee to the tax office, this fee must be unfairly returned to him. As examples of these situations, the error cases regulated in VUK Articles 116, 117 and 118 can be given.

Causal Link Between Action and Result

Another situation we need to mention under this heading is that there must be a causal link between the tax loss and the taxpayer's behavior. If the tax loss is not caused by any behavior on the part of the taxpayer, no penalty will be imposed on the taxpayer.

As a matter of fact, in the decision numbered 2012/1136 of the 7th Chamber of the Council of State, it is stated that "However, in order to impose a tax loss penalty, it is not sufficient for the tax to have been lost; in addition, the tax loss must be caused by the taxpayer or the tax officer. The tax administration's ability to use its authority to impose penalties will only be possible if a causal link can be established between the tax loss and the action of the taxpayer or the tax officer. In the case, the tax loss was caused by the buyer, who unfairly benefited from the exemption, by not declaring it, even though he had previously benefited from the same exemption in the 2004/September period, by violating the "once in five years" condition stipulated in subparagraph (b) of the 2nd paragraph of Article 7 of the Special Consumption Tax Law. "There is no causal link between the act that caused the tax and the plaintiff, who was not able to know about it. Since there is no legality in imposing a penalty on behalf of the plaintiff who has no causal connection with the act that caused tax loss, this provision paragraph, which is the subject of the appeal against the court decision, is not found to be correct." It is stated as follows.

SPIRITUAL ELEMENT

Intent or negligence does not matter in committing the crime of tax loss. Having a tax loss is sufficient for a crime to be committed. Therefore, the crime can be committed intentionally or negligently. As we have stated in many places, the purpose here is to prevent tax loss.

PUNISHMENT FOR TAX LOSS MISMISSION

The amount of tax loss penalty varies depending on the action groups mentioned above. The basic case of misdemeanor (medium-qualified acts) requires a 1-fold tax loss penalty.

If the misdemeanor is committed with the acts specified in Article 359, a 3-fold tax loss penalty is imposed on the taxpayer.

If the taxpayer files the return late on his own, the tax loss penalty is applied at a half-rate discount.

Within the scope of the invitation for explanation, if the conditions stated above are met, the penalty to be imposed on the taxpayer is reduced by 4/5.

TAX LOSS PENALTY DELAY INTEREST

When tax loss penalty is imposed, the amount of tax loss is first calculated. This calculated amount constitutes the tax principal. Default interest is also applied together with the assessment of the original tax. In the notification sent to the taxpayer, interest will be charged from the original tax assessment date.

In terms of penalties, delay interest begins to accrue from the maturity date. According to Article 51 of AATUHK; "A late payment interest of 4% is applied to the part of the public receivable that is not paid within the payment period, separately for each month, starting from the expiry date of the maturity date."

If a lawsuit has been filed against the tax loss penalty, Article 112/3b of the Tax Procedure Law must be applied. According to the article; "Delay interest is applied to the unpaid portion of the taxes subject to the lawsuit, at the rate of the delay interest determined in accordance with Law No. 6183, for the period starting from the normal due date for the period to which the assessment is relevant and specified in the tax laws, until the date of notification of the decision of the judicial body." In other words, filing a lawsuit does not prevent late payment interest. In these cases, the late payment interest is applied from the maturity date until the date the court decision is notified to the administration.

TAX LOSS PENALTY OBJECTION

Objection to tax penalty refers to the taxpayer's constitutional right to file a lawsuit. The taxpayer has the right to file an annulment lawsuit in the tax court within 30 days from the notification of the tax loss penalty notice. It should be noted that the prerequisite for filing a lawsuit is that the notice has been served.

If the taxpayer has requested a compromise but this compromise has not been achieved, the time to file a lawsuit is calculated by subtracting the negotiation period from the 30-day period. However, if the conciliation negotiations have resulted in a failure to reach an agreement and the period for filing a lawsuit remains less than 15 days, the period for filing a lawsuit is 15 days from the notification of the non-settlement report.

In the tax loss penalty annulment case, the competent court is the court where the tax office that imposed the tax loss penalty is located.

With the opening of the case, the collection process of the penalty automatically stops in accordance with the provision of Article 27 of the IYUK. Additionally, it is not necessary to decide on a stay of execution. Even if a lawsuit is filed, the taxpayer can pay the tax debt. In addition, there is a regulation that will provide a discount to the taxpayer in case of abandoning the case.

If the case is acceptedthe tax loss penalty will be cancelled. If the case is rejected, tax loss penalty is deemed to have been incurred. After this stage, the administration issues notice number 2 and sends it to the taxpayer. The taxpayer must make payment within 30 days after the notice is served. Otherwise, compulsory enforcement will occur. This procedure also applies in case of partial acceptance.

An appeal may be filed against tax court decisions. However, this application does not automatically stop the execution. The administration can make collections. If the conditions are met, a stay of execution may be requested in the court of appeal.

Again, in case certain conditions are met, the possibility of appeal against the decisions of the regional administrative court is also open.

TAX LOSS PENALTY STATEMENT

The limitation period for imposing tax loss penalties is regulated in Article 374 of the Tax Procedure Law. According to the relevant article; In the case of a tax loss penalty, no penalty can be imposed after 5 years have passed, starting from the first day of the year following the calendar year in which the tax receivable to which the penalty is based arises. The statute of limitations for imposing fines is regulated here. No fines will be imposed after this period. While the notification period interrupts the limitation period, if an application is made to the appraisal commission, the limitation period will be stopped. Detailed information on the subject is available in our article titled tax limitation periods.

There is also a collection limitation period that is not regulated in VUK but is regulated in AATUHK. This period regulates that receivables that cannot be collected within a certain period of time after the penalty is due will now become statute-barred. The collection limitation period regulated in the law is also 5 years. The beginning of the 5-year period starts from the beginning of the year following the year in which the maturity falls. Since the maturity date is mentioned here, not the notification of the penalty, it is necessary to pay attention to the maturity dates.

TAX LOSS PARTICIPATION

It is possible to be complicit in tax loss. However, participation is only possible for tax loss crimes committed by the acts specified in Article 359. The participant will be penalized in the amount of tax loss. In order for a participant to be penalized, the participant must have acted deliberately.

TAX LOSS REPETITION

According to the TDK dictionary, the word "repetition" of Arabic origin is defined as repetition. In the sense of criminal law, recidivism means repeating the crime and persistence in committing the crime. Article 339 of the Tax Procedure Law introduced recidivism provisions for tax misdemeanors and stated that the penalty would be increased in case of recidivism. It is clearly stated in the text of the article that the recidivism provisions will only apply to tax loss and irregularity misdemeanors. According to Article 339 of the VUK; "For those who have been fined for causing tax loss or irregularity and whose penalty has become final, if the penalty is imposed again within five years for tax loss and two years for irregularity, starting from the beginning of the year following the date on which the penalty becomes final, the penalty for tax loss will be increased by fifty percent and the penalty for irregularity will be increased by twenty-five percent."

Repetition Conditions

There are various differences between the recidivism provisions in criminal law and the recidivism provisions in the VUK. Namely; In order for the recidivism provisions to be applied in tax loss misdemeanor, the first and second misdemeanor must be exactly the same misdemeanor. In other words, if there is a previous misdemeanor irregularity and subsequent tax loss, the recidivism provisions cannot be applied. Both crimes must be the same.

The second condition for recidivism is that the previous sentence must be finalized on the date of the next sentence. If the previous sentence is not a final sentence, the next sentence cannot be increased due to recidivism. There are various ways to finalize the tax penalty. The penalty becomes final in cases such as payment, failure to file a lawsuit in due time, rejection of the case, reconciliation, and payment of the penalty at a reduced rate. In order for the recidivism provisions to be applied, it is sufficient for the punishment to be finalized. Additionally, no collection or other conditions will be required. It does not matter whether the taxpayer has not been notified by the administration. As a matter of fact, in the decision numbered 2018/6024 K. of the 7th Chamber of the Council of State on the subject, "In accordance with Article 339 of the Tax Procedure Law No. 213, in order for the penalty to be applied incrementally due to recidivism, the next action to be taken as a basis for recidivism must have occurred on the date after the finalization date of the penalty imposed for a previously committed act. In this regard, the Court stated in Article 339 of the Tax Procedure Law No. 213." While it is necessary to separately evaluate whether the conditions foreseen for the application of recidivism have been met, the penalty provision paragraph of the Court's decision, which was given without any evaluation of the part of the transactions regarding the tax loss penalty imposed by applying the recidivism provisions, was not found correct." It is stated as follows.

The last condition for recidivism in terms of tax loss penalty is that the next penalty must be imposed within 5 years after the previous penalty becomes final. The second misdemeanor must be committed within 5 years after the penalty imposed for the first misdemeanor becomes final. The beginning of the 5-year period is the beginning of the year following the finalization of the penalty imposed for the first misdemeanor. As a matter of fact, in the decision numbered 2011/5756 of the 4th Chamber of the Council of State, "In order for the recidivism provisions to be applied, the next action to be taken as basis for the recidivism provision must have occurred after the beginning of the year following the finalization date of the penalty imposed for the first action. It is not legally possible to apply the recidivism provisions to the tax loss penalty imposed for provisional tax in the same year periods." The provision was made as follows.

If the conditions for recurrence are met in the tax loss penalty, the next penalty will be increased by fifty percent.

CONSOLIDATION BEFORE TAX LOSS ASSESSMENT

Pre-assessment reconciliation in tax loss penalties can only be applied to penalties committed with light and medium acts. Serious acts are not within the scope of pre-assessment reconciliation. The request for reconciliation may come from the taxpayer or the tax office. Taxpayers may request conciliation before assessment until the final report regarding the investigation is prepared. As we mentioned, the tax inspector can also call the taxpayer to compromise through an invitation. In this case, the limitation period for assessment must be more than 3 months. Otherwise, the invitation cannot be made.

If an agreement is reached, the penalties are now considered final. There is no right to file a lawsuit after conciliation. In addition, after the pre-assessment compromise (whether or not a compromise is reached), the taxpayer's right to apply for post-assessment compromise will also end. If a compromise is reached, the taxpayer will no longer benefit from a reduction in penalties. If payment is not made after reconciliation, the penalty is collected through compulsory enforcement. Therefore, the agreement does not become void.

If no agreement can be reached in the pre-assessment conciliation negotiations, the taxpayer can file a lawsuit, but cannot apply for conciliation after the assessment. Moreover, even if no compromise has been reached, the taxpayer can accept the settlement by accepting the amount stated in the report until the end of the lawsuit filing period. If agreement is not reached, the taxpayer may apply for a reduction in the penalty.

If a compromise is reached, the tax penalty will be reduced by an additional twenty-five percent. (Art. 376) However, for the discount, payment must be made on time.

TAX LOSS PENALTY DISCOUNT

VUK m. 376

"Taxpayer or tax responsible;

1. If the person declares that he/she will pay the tax or tax difference assessed additionally, ex officio or by the administration, and half of the tax loss, irregularity and special irregularity penalties, within thirty days from the notification date of the notices, and pays the relevant tax office within the due date or within three months from the end of the maturity by providing security of the type specified in Law No. 6183, half of the imposed penalty,

2. "In case of compromise, if the person pays the agreed tax or tax difference and 75% of the tax loss penalty within the payment periods specified in subparagraph (1) of the first paragraph of the additional article 8 of this Law, 25% of the agreed penalty will be deducted."

To benefit from the discount, no lawsuit must be filed. The taxpayer can benefit from the deduction regardless of the act committed for tax loss.