Regulations, related to “Adjustment of Legal Books of Enterprises”, of Bill of Law presented to Grand National Assembly on January 27.

Our explanations regarding provisions (article 6), related to adjustment of legal books of enterprises, of “Bill of Law on Restructuring of Certain Receivables and Making Amendments on Certain Laws” presented to Speaker’s office of Grand National Assembly on January 23, 2023 are called to your attention below:

Income and corporate tax taxpayers can recognize commodities, machinery, equipment and fixture, not included on their books, as available at their entities based on their market value through notifying tax office accompanied with an inventory list. Taxpayers who want to benefit from this application must carry out the said transactions until April 30, 2023.

A reverse charge VAT, calculated based on half of rates applicable on declared prices of machinery, equipment, fixtures and commodities, should be paid within the declaration submission period. This tax shall be paid within declaration submission period through being declared as reverse charge with a separate declaration.

- Income and Corporate taxpayers may register and include commodities, machinery, equipment and fixtures, which are available on their records however not physically available at their workplaces, provided that they issue invoice and fulfill all tax liabilities through taking into account gross profit rate calculated according to current year records in terms of commodities and market values of machinery, equipment and fixtures determined by themselves or their associated professional institutions.

Such transactions should be carried out until April 30, 2023.

VAT payable in the above framework is paid in three equal installments. First installment is paid within the declaration submission period while following two installments are paid in first and second month following the declaration submission period.

- Corporate taxpayers keeping their books on balance sheet basis, may adjust their records in terms of cash balances, which are demonstrated on their balance sheets dated December 31, 2022, however not included physically at their workplaces and the net receivable amount between amounts which are considered as receivables from shareholders and due to their transactions out of their main field of activity (arising due to borrowing and similar reasons) and associated transactions under other accounts through making a declaration to tax offices.

It is necessary to make declarations and amendments of records to the tax office by April 30, 2023.

The tax calculated at the rate of 3% over the declared amounts will be paid within the period of submitting the declaration.

The above provisions shall enter into force in the publication date in case the Bill of Law is identically enacted.