What Has Changed?
- Turkey’s 71st Circular under the VAT General Application Law (3065 Numbered VAT Law) has been published.(gib.gov.tr)
- It allows extension of deadlines for submitting Special Purpose CPA (certified public accountant) reports that establish eligibility for deducting VAT which was previously rejected.
Who Is Affected?
- VAT-registered businesses whose input VAT deduction was denied, possibly due to missing or incomplete CPA reports
- CPA professionals and auditors helping clients make claims
- Accounting staff who prepare VAT returns and supporting documentation
Practical Implications
- More time: Businesses have additional time to produce valid CPA reports and submit them without risking current denial of the deduction.
- Cash flow and compliance benefits: Bringing claims back into inventaire improves VAT credit position, reducing net tax liabilities.
- Reduced risk: For those who lost deductions, there’s a window to comply before enforcement catches up.
Example
A company which imported machinery last year, but its VAT-deduction request was denied due to no CPA report, now can upon extension, obtain the report and regain input VAT credit that was previously disallowed. Say your original claim was €5,000; with the circular, you may now collect that sum if the report is submitted within the extended deadline.
Action Steps for Businesses
- Check your VAT returns for any line items where deduction was rejected due to missing CPA report.
- Engage a certified public accountant to prepare or validate the needed report ASAP.
- Submit the CPA report within the newly extended deadline—you’ll likely avoid further penalties.
- Document everything: date of rejection, reason, submission of extended report.
Why This Matters
- Helps businesses recover deductions—increasing cash flow.
- Shows government is offering relief where compliance is challenging.
- Signals an intention to improve VAT system fairness and reduce burdens in verification for compliant taxpayers.
Bottom line: If you're dealing with denied VAT deductions due to CPA reporting gaps, this circular provides an opportunity to correct early mistakes—don’t miss the chance to reclaim eligible credits.