TAX ERRORS AND REMEDY PROCEDURES

What Are Tax Errors?

كما هو معرف في المادة 116 من قانون الإجراءات الضريبية (VUK)، “الخطأ الضريبي هو طلب أو تحصيل ضريبة زائدة أو ناقصة بسبب الأخطاء التي تحدث في الحسابات المتعلقة بالضريبة أو في عملية فرض الضريبة.” يمكن أن تحدث الأخطاء الضريبية في مرحلة تحديد الضريبة، وكذلك في مرحلة التحصيل. من الناحية النظرية، يتم تقسيم الأخطاء الضريبية إلى نوعين: أخطاء الحساب وأخطاء في فرض الضريبة.

What Are Calculation Errors?

In essence, calculation errors encompass mistakes made regarding the amount of tax. Accordingly, Article 117 of the VUK distinguishes errors related to tax amounts as follows:
‘’1. Basis Errors: These refer to situations where the figures or deductions related to the tax base are shown or calculated incorrectly, either as too high or too low, in documents such as tax returns, assessment slips, notices, levy lists, and decisions.

2. Errors in the tax amount: These refer to situations where tax rates and tariffs are applied incorrectly, offsets are not made or are made incorrectly, or where the tax is calculated or shown as too low or too high in the documents listed in the first paragraph.
3. Tax duplication: This occurs when, under the same tax law, the same tax is requested or collected more than once for the same tax base within a specific taxation period.

What Are Taxation Errors?

Taxation errors occur in situations where the tax liability or the event that triggers the tax is incorrectly identified. These errors generally concern the essence and nature of the taxation process. Article 118 of the VUK explains taxation errors as follows:

‘’1. Error in the taxpayer’s identity: This occurs when a tax is requested or collected from a person other than the actual debtor of the tax.

2. Error in tax liability: This occurs when tax is requested or collected from individuals who are clearly not subject to tax or exempt from it.
3. Error in the subject matter: This occurs when tax is requested or collected on income, wealth, goods, assets, documents, or transactions that are clearly not subject to tax or are exempt from it.
4. Error in the taxation or exemption period: This occurs when the relevant tax period is incorrectly indicated, or the tax is calculated as too low or too high due to an error in the period.

How Are Tax Errors Identified?

The issue of identifying tax errors is regulated under Article 119 of the VUK, titled “Detection of Errors.” According to this article, tax errors can be identified in five ways:

1. The error being identified or noticed by the relevant officer
2. The error being discovered as a result of examinations by senior officers
3. The error being revealed during an inspection
4. The error being revealed during a tax audit
5. The taxpayer’s special application

What Are the Ways to Correct Tax Errors?

The issue of correcting tax errors is addressed in Articles 120 and following of the VUK, and it is carried out either upon the taxpayer’s request or administratively by the tax office (by the tax office director). The tax administration corrects tax errors spontaneously when it identifies clear tax errors.

Applying for Correction Within the Time Limit for Filing a Lawsuit to the Tax Court

The application to the tax court for the correction of tax errors is regulated under Article 122 of the Tax Procedure Law (VUK):
“Taxpayers may request the correction of errors in tax procedures from the tax office in writing. It is permissible to send these requests by registered mail.”
Therefore, according to this provision, it is understood that the petition containing the request for correction can be submitted to the tax office either in person or sent by registered mail.

Can an Application for Correction Be Made Even After the Deadline for Filing a Lawsuit Before the Tax Court Has Passed?

It should be known that an application for correction of tax errors can be made even if the deadline for filing a lawsuit has passed. In this context, the statute of limitations for filing a lawsuit does not constitute an obstacle to requesting a correction. In cases of tax errors, the correction request can be submitted to the Tax Office either in writing or by registered mail. The tax office is obliged to examine the request within 30 days and make a decision either to accept or reject it.

Procedure of Litigation in Lawsuits Filed upon Correction and Complaint Regarding Tax Errors

In lawsuits filed upon correction and complaint regarding tax errors, the competent court is the Tax Court, while the authorized court is the Tax Court located in the jurisdiction where the Tax Office Directorate, to which the complaint petition was submitted, is situated. In this regard, the party or parties may require a tax attorney, specifically a tax attorney in Antalya, to initiate and follow up the relevant lawsuit.

Frequently Asked Questions

1.Who Has the Authority to Correct Tax Errors?

The authority to decide on the correction of tax errors lies with the director of the relevant Tax Office. The correction process can be initiated either upon the taxpayer’s application or, as mentioned, by the director of the Tax Office.

2.Is it possible to regain the right to file a lawsuit through correction and complaint in every case where the litigation period has been missed?

If the litigation period has been missed, the taxpayer cannot regain the right to file a lawsuit by resorting again to correction or complaint procedures. Since the option to file a lawsuit applies only to accounting and tax errors, a taxpayer who has been served with a tax notice but failed to file a lawsuit within the legal period does not have the right to file a lawsuit through correction or complaint.

3.How can an incorrect tax declaration be corrected?

In cases where the tax return submitted by the taxpayer contains incomplete or incorrect elements, the return is considered erroneous. Accordingly, the taxpayer may submit a new tax return to correct the missing or erroneous elements. It should be noted that if the erroneous tax return was submitted electronically, the correction return must also be submitted electronically.

4.What is the Statute of Limitations for Correcting Tax Errors?

The statute of limitations for correcting tax errors is 5 years from the year the taxable event occurs. For example, if a tax error is made in April 2025, the statute of limitations for correcting this error will begin on January 1, 2025, and the 5-year statute of limitations will expire in 2030. As a result, the request to correct the tax error must be made within the relevant statute of limitations period.

As mentioned above, tax errors that are not corrected within 5 years will expire under the statute of limitations, and these errors cannot be corrected by the administration on its own initiative. However, there are exceptions to this rule under Article 126 of the VUK:

a) If a mistake is made in taxes assessed and notified within the last year of the statute of limitations period;

b) In cases where taxes are assessed and notified via publication without being brought to court, and the taxpayer is notified of the payment order;

c) In cases where the notice and payment order are notified via publication and a lien is applied according to Law No. 6183;

The period cannot be less than one year from the date.

Some Council of State Decisions Regarding Tax Errors and Correction Methods

1. “…In the case of a reassessment made solely based on a report from the customs administration without a base of an assessed or determined tax base or tax base difference by the assessment commission or tax audit report, as well as based on a record prepared in reference to the letter sent by the customs administration, there is no compliance with the law. Therefore, the appellate court’s decision, which annulled the transaction based on the rationale mentioned above, has been deemed correct.” (Council of State, 7th Chamber, Decision dated 21.04.2021, Case No. 2018/4916, Decision No. 2021/2184)
2. “In the dispute, the event giving rise to the stamp duty for the tender is the holding of the tender on … date, and the event giving rise to the stamp duty for the contract is the signing of the contract between … Anonymous Company and the plaintiff company on … date. The decision of the Administrative Court dated … with case number E: …, K: … to annul the tender was upheld by the Council of State’s Thirteenth Chamber decision dated 21/12/2016, with case number E:2016/2508, K:2016/4299, and became final. As a result, the tender and the contract signed by the plaintiff become void as of … date, and it cannot be expected for the plaintiff to file a lawsuit within the thirty-day period for filing a lawsuit, starting from the date the payment was made for the tender and contract stamp duties. Furthermore, since it is not possible to foresee that the tender and the contract will be annulled at a later date, filing a lawsuit within thirty days from the payment date contradicts the natural course of events.” (Council of State, Tax Disputes Chamber, Decision dated 23.10.2024, Case No. 2023/643, Decision No. 2024/959)
3. “The resolution of the dispute depends on determining whether the transaction regarding the immovable property purchased by the plaintiff through enforcement is exempt from value-added tax or not. Since the determination of whether the sale of the property falls within the exemption scope requires legal interpretation, the claims made by the plaintiff can only be examined in a lawsuit filed within the prescribed period against the tax assessment process. In this case, as it is not possible to examine the legal dispute within the scope of tax errors and since there is no legal error in the process of implied rejection of the complaint, the decision of the Tax Court that annulled the process must be overturned.” (Council of State, Tax Disputes Chambers, Decision dated 09.02.2022, Case No. 2020/804, Decision No. 2022/69)
4. “Since the inclusion of a non-taxable element in the tax base constitutes a clear tax error according to Article 117 of the Tax Procedure Law No. 213, there are conditions for correcting these errors, for which no previous decision has been made by the courts. If an agreement is reached before the assessment, no lawsuit can be filed regarding the matter determined by the report, and the court decision that rejected the lawsuit based on Article 11, which is provided for situations outside the scope of tax errors, is contrary to the law.” (Council of State, 3rd Chamber, Decision dated 04.04.2006, Case No. 2005/2364, Decision No. 2006/942)
5. ‘”Errors in the tax base, errors in the amount of tax, and accounting errors in the form of tax duplication generally arise from simple mistakes that are easily identified. In order for an error to be considered as an accounting error, it must clearly be included within the scope of accounting errors as defined in the Tax Procedure Law (VUK). Within this framework, it can be demonstrated that accounting errors are limited to those explicitly listed in the law.” (Council of State, 7th Chamber, Decision dated 27.05.2004, Case No. 2001/2149, Decision No. 2004/1473)

Views: 0