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An assessment on the condition • Taxes accrued on the concerning tax returns should be
of payment of taxes accrued paid on time as well,
on the tax returns submitted • There should not be any ex officio, additional or
administrative assessment on the taxpayer regarding the
in the last two years and the taxes subject to declaration concerning the year in which
the tax return belongs and the previous two years;
year in which the reduction is • Any tax debt exceeding TL 1,000 including tax penalties
calculated within the context on the submission date of the concerning tax return should
of tax reduction for compliant not exist.
taxpayers The repetitive Article 121 of GVK has the potential to cause
various problems in practice in terms of the legislative
technique and the unclear terms used. In the rest of the
l. Introduction study, the requirement of paying taxes accrued on the tax
returns submitted in the last two years and the year in which
In our tax law, so as to ensure effective tax collection, the reduction is calculated, which is observed to cause
penalties are already in place, however no rewards were frequent problems in practice, will be emphasized.
provided for compliant taxpayers previously. This attitude
has been changed through the re-arrangement of repetitive IV. Condition of paying taxes accrued on the
Article 121 within the Income Tax Law no.193 (GVK) and
the introduction of a 5 percent reduction to the taxpayers tax returns submitted in the last two years and
meeting certain conditions related to tax duties. the year in which the reduction is calculated

II. Reduction for compliant taxpayers in general So as to ensure that the subject matter is fully understood,
and scope the scope should be determined in terms of time and tax
types for the wording of “tax returns for the year in which
the reduction shall be calculated and the last two years
The framework for tax reduction implementation in before that year “.
terms of tax types, taxpayers and amounts are indicated
within the 1st paragraph of the re-arranged Article 121 • Scope in terms of period
of GVK. Tax reduction was limited with income tax and
corporate tax. Taxpayers that are entitled to benefit from The scope in terms of period is clear enough to require
the aforementioned tax reduction implementation are the no interpretation. The aforementioned provision refers to
income taxpayers and corporate taxpayers. However, for
taxpayers, coverage is limited on a variety of issues such as a period covering the year in which the reduction will be
calculated and the previous two years.
income types and the sector in which they operate. So that
only income taxpayers can benefit from the tax reductions For instance; 2018, the year that the tax return belongs to
due to their commercial, agricultural and professional and subject to reduction and the two previous years of 2017
activities. In that case, it is concluded that the taxpayers
obtaining other income elements mentioned in the GVK and 2016 will be taken into consideration when checking
whether the taxpayer submitting tax return for 2018 fulfills
are excluded from the scope of tax reduction. In terms
of corporate taxpayers, no distinction has been made on the concerning requirement or not.
earnings and revenue types, but corporate taxpayers dealing • Scope in terms of taxes
with activities in the financial and banking sectors, insurance
and reinsurance companies, pension companies and pension
mutual funds are excluded from the scope of tax reduction. In the 5th paragraph of the repetitive Article 121 within the
GVK, it’s indicated as a rule that the terms of ‘tax returns and
Consequently, tax reductions are limited in terms of amount tax’ should be understood as the tax returns to be submitted
to the Treasury and Finance Ministry and the taxes accrued
within the repetitive Article 121 of the GVK. The concerning
upper limit is updated according to the revaluation rate and on these returns. Taxes that are accrued through declaration
applied as 1.200.000 Turkish Liras for the year 2019 are essentially taxes on which the declaration-based
assessment procedure applies.
III. Terms of tax reduction to compliant In practice, one of the problems encountered regarding the
taxpayers scope of this condition in terms of taxes is fixed stamp taxes
arising from tax returns and not paid by taxpayers. The tax
The conditions sought for benefitting from the opportunity administration gives guidance by defending that stamp tax
of tax reduction are listed in three sub-items within the 2nd is a tax subject to declaration and fixed stamp taxes arising
paragraph of the repetitive Article 121 of GVK. In order to from tax returns acrrued on these returns; the taxpayer’s
enable taxpayers to benefit from the tax reduction, they benefitting from tax reduction is prevented if they did not
should be meeting the conditions indicated below; pay the fixed stamp tax arising from tax return on the
grounds that they did not meet this condition. Where as, the
• Tax returns for the year in which the reduction will be approach of the tax administration extends the scope of the
calculated and the previous two years should be filed on aforementioned clause in terms of tax types beyond that
time, envisaged in the law. As detected above, the scope of the

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