The Ministry of Treasury and Finance-Revenue Administration prepared a Draft General Communiqué on Income Tax (“Draft”) regarding the obligation of certification in lease payments and submitted it for public consultation.
With the said Draft, it is planned to determine the procedures and principles of the collections and payments to be made by income and corporate taxpayers and those who do not have any taxpayer registration regarding workplace and housing rental transactions.
With this Draft, it is planned to make it compulsory for taxpayers and non-taxpayers to certify collections and payments with documents issued by banks or postal administrations within the framework of Article 257 of the Tax Procedure Law No. 213. The regulation is related to workplace and residence leasing transactions of income and corporate taxpayers and non-taxpayers and aims to prevent tax loss and increase tax revenues.
It is envisaged that the lessors of residential and business premises will be obliged to certify the collections and payments made about the leasing transactions only with documents issued by banks or the Post and Telegraph Organization. Short-term residential leases will also be subject to this certification obligation. Collections made through court and execution will not be considered within this scope. In the case of shared real estate leases, it will be deemed that the obligation to certify is fulfilled if the entire rental amount is paid to a lessor. This regulation aims to increase the transparency of leasing transactions and establish a secure relationship between the parties.
According to Draft, taxpayers who violate the obligation to certify will be subject to a special irregularity penalty following Article 355 of the Tax Procedure Law. The foreseen penalty amounts differ according to the type of taxpayer; 20.000 TL for first-class merchants and self-employed persons, 10.000 TL for second-class merchants, farmers who keep books, and taxpayers whose earnings are determined in simple method, 5.000 TL or 10% of the transaction amount, whichever is higher, is planned to be applied for other taxpayers. In the event that the Draft enters into force in its current form, these penalties will be effective for transactions related to the obligation to certify “as of 28/7/2024.”
It is stated that taxpayers who make payments in violation of the certification obligation will not be penalized if they notify the relevant administration within five business days following the payment. This regulation is in parallel with the regret regulation, which is frequently applied in tax practices, and aims to increase tax compliance.
In fact, with the practices planned to be put into effect with the Draft, it is aimed to regulate the rent disputes that have been frequently encountered recently and to bring the relationship between lessors and lessees to a provable ground. Following the entry into force of this Draft, it is envisaged that the operability of rent declarations will be increased and the tax system will become more controllable by the state. We will see the changes that the relevant Draft has undergone within the framework of public opinion after the publication of the communiqué.
