Turkish Tax News
08 June 2023Nazmi KARYAĞDI

The earthquake tax (Additional Tax) divides taxpayers in two

On February 6, a tax called Earthquake Tax (Additional Tax) was enacted and implemented in order to meet the urgent financing needs that emerged as a result of the earthquakes that occurred in the Pazarcık and Elbistan districts of Kahramanmaraş and were called the disaster of the century.

To put it very roughly; A significant proportion of taxpayers who will not pay corporate tax due to deductions and exemptions in 2022 are required to pay 10% or 5% additional tax on deductions and exemptions.

The new tax liability has been fulfilled on May 5, 2023, with the postponement of the 2022 corporate tax return and payment period.

However, in the meantime, there was a "flash of declarations with reservation" in the business and tax world. Many taxpayers participated in this race by clicking the declaration box with reservations in their e-files without examining their own situation.

However, when the issue of filing a lawsuit came to the agenda 30 days after the deadline for filing the declaration, taxpayers began to question the issue of "with reservation", which they had not thought about before.

Why did we do this?

Many individuals and institutions provided financial and in-kind aid to the Aid Campaign launched by Disaster and Emergency Management Presidency (AFAD) within the scope of Presidential Decision No. 3483 right after the earthquake.

In fact, "Is it conscientious to deduct donations and aids from the tax base?" published in the ECONOMY Newspaper. As we mentioned in our article titled, some taxpayers did not associate their donations with taxes by saying, “I am making this donation not for tax advantage, but for charity, for goodness, for help” and did not gain any tax advantage.

Taxpayers who helped earthquake victims with humanitarian feelings a few weeks ago, whereas now; They were going to file a lawsuit in the Constitutional Court to cancel the earthquake tax, which was brought by the state to meet the very serious need for resources.

Of course, this caused a kind of emotional dilemma for some of the taxpayers.

Will the Constitutional Court cancel the earthquake tax?

We have entered the last days of filing a lawsuit for those who file a declaration with a reservation.

Non-retroactivity of laws, violation of taxation according to solvency, etc. It is legally possible to apply to the Constitutional Court for annulment due to constitutional taxation principles (Constitution Art.-150-152).

In the meantime, considering that the main opposition party CHP, allegedly unconstitutional, has not filed an application regarding the earthquake tax, individual taxpayers have to apply to the tax courts with this claim.

If the Tax Courts consider these claims appropriate, they will be able to take the cancellation request to the Constitutional Court.

Of course, a Tax Court can also automatically bring it to the higher court in the claim of unconstitutionality.

When we look at the past approach of the Constitutional Court on such extraordinary taxes, it is seen that it generally makes decisions in the form of approval of newly introduced taxes.

If any of the tax courts takes the earthquake tax to the Constitutional Court, we will see together what the outcome will be this time.

Lesson from here

As in Charlie Chaplin's silent movie classic "The Gold Rush"; In terms of corporate taxpayers, on May 5, 2023, there was a situation such as an attack on return with reservation.

There is no doubt that we truly live in an age of speed and flexibility. However, I think it is the healthiest thing to stop, think, decide and put into practice.

Regardless of our age, whether or not to disable the scales of conscience, which is the only difference of being human, is constantly confronting us as the never-ending test of human beings.

To summarize, corporate taxpayers are also faced with such a test today.

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