Turkey: Penalties for Noncompliance with the Mandatory Electronic Document Framework

Selin Adler Ring
July 8, 2020

For rules to carry any real weight, the rule-maker must combine compliance with that rule with either a carrot or a stick. In the field of tax legislation, the rule-maker, in this case, the legislator or the tax authority, almost always goes down the route of the stick in situations of noncompliance. And the penalties are generally significant enough to make the subjects act by the rules. This fundamental concept also applies within the Turkish electronic documents framework and there are sanctions prescribed to penalize noncompliance of taxpayers.

The penalties fall under two categories: penalties for e-invoice, e- arşiv invoice and export invoices, and penalties for e-delivery notes.

Penalties for noncompliance with e-invoice, e-arşiv invoice and export invoices

According to article V.6 of the General Communique on the Tax Procedural Law No. 509 (Communique), the following scenarios of noncompliance will result in a fine that is 10% of the actual amount or of the missing amount of an e-invoice (e-invoice, e-arşiv invoice and export invoices). The fine can’t be lower than TRY 350 (approx. EUR 50) per invoice and the maximum fines might reach TRY 180,000 (approx. EUR 25,700) annually per document type. This would apply as follows:

  • Issuing a paper invoice instead of an electronic one in the cases where electronic issuance is mandatory
  • Accepting a paper invoice that was supposed to be issued electronically
  • Misstating the price on the invoice or accepting an invoice which includes the wrong price
  • Not issuing e-invoices according to the rules and in the cases where e-invoices are deemed as not issued.

Penalizes apply to not only the issuer but also the receiver of invoices. So, the receivers of these invoices should be cautious about their e-invoicing process.

Penalties for e-delivery notes in the case of noncompliance

Noncompliance with the rules relating to e-delivery notes will result in a TRY 350 (approx. EUR 50) fine per document. The maximum fines might reach TRY 180,000 (approx. EUR 25,700) annually but can’t exceed this amount. These capped fines are also updated every year incrementally.

There are six cases considered as noncompliance:

  • Not issuing the e-delivery note
  • Not using an e-delivery note
  • Not keeping the e-delivery note present during transportation
  • Not issuing the delivery note electronically
  • In the cases where the copy of the e-delivery note does not reflect the same information or issuing an e-delivery note that does not reflect the transaction
  • In the cases where e-delivery notes are deemed as not issued.

To operate and develop their businesses in Turkey, a jurisdiction with a complex structure and a heavily regulated e-documents framework, taxpayers must make sure they have compliant e-document processes in place. Otherwise, the penalties and fines imposed for noncompliance can be significant.

Take Action

Sovos has more than a decade of experience keeping clients up to date with e-invoicing mandates all over the world.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Selin Adler Ring

Selin is Regulatory Counsel at Sovos. Based in Stockholm and originally from Turkey, Selin’s background is in corporate and commercial law, and currently specializes in global e-invoicing compliance. Selin earned a Law degree in her home country and has a master’s degree in Law and Economics.
Share This Post

LATAM VAT & Fiscal Reporting
May 20, 2020
Sovos Acquires Taxweb, Extends Tax Determination Capabilities in World’s Most Challenging Compliance Landscape

Earlier this month Sovos announced its second acquisition of 2020, completing our solution for Brazil with an unparalleled offering that solves tax compliance in the place where it is most challenging to do so.  Too many companies doing business in Brazil have been burdened by managing multiple point solutions for continuous transaction controls (CTCs), tax […]

Tax Compliance
August 7, 2020
GAO Urges IRS to Overhaul 1099 Reporting for the Gig

A couple of weeks ago, the Government Accountability Office (GAO) released a report to the Senate Finance Committee describing the issues the IRS faces in enforcing income tax compliance for gig economy workers. The report highlighted long-standing issues the government has been grappling with in receiving tax information necessary to enforce compliance along with specific […]

EMEA VAT & Fiscal Reporting
August 4, 2020
New VAT Rules for Online Marketplaces and Imports of Goods into the UK

The United Kingdom’s HMRC has issued new guidance on the VAT treatment of cross-border sales of goods and online marketplaces beginning 1 January 2021, following the end of the transition period. Cross-Border Sales under £135 New rules will apply when a business sells goods for £135 or less to a UK customer and the goods […]

EMEA VAT & Fiscal Reporting
August 3, 2020
New EU Tax Package: VAT Priorities

On 15 July 2020, the European Commission (EC) adopted a new Tax Package, intended to increase tax compliance while reducing administrative burden on businesses. The Tax Package contains a number of proposals related to VAT, of which three in particular stand out: A single EU VAT registration for taxpayers; Modernized VAT reporting obligations; and Facilitated […]

IPT
August 3, 2020
Should Insurers Receive an IPT Holiday From Their Governments?

It’s been a tough year for businesses. Whilst many have accepted that 2020 is likely to be a year to forget, unfortunately tax still needs filing and paying. Tax authorities have been understanding – nobody could have foreseen this – and there has been a concerted effort to provide SMEs with tax relief and postponements […]

Asia Pacific E-Invoicing Compliance EMEA India
July 31, 2020
India: Last-Minute Changes to the Proposed E-Invoicing System

The October deadline is fast approaching for the Indian CTC invoicing mandate, but it remains a moving target. In a swift move that was published just two months prior to go-live, authorities have now changed the scope of who is affected by the reform, as well as updated the JSON format. Why the change? The […]