Taxpayers on whom penalties have been imposed have a number of avenues of recourse:
1. They may seek a REDUCTION IN THE PENALTY in accordance with article 376 of the Tax Procedures Code. In such cases, 1/3 of the penalties for irregularities and 1/2 of the penalties for tax evasion, gross negligence, or negligence, may be forgiven.
2. SETTLEMENT
The taxpayer may apply to commission of reconciliation and may request a settlement on the payable portion of the tax and penalty. In such cases, a settlement for a reduction is possible.
The settlement may also be applied during the course of a tax inspection and accordingly, a negotiation could be made concerning the amount of tax and penalty to be assessed. However, should the parties fail to reach a agreement, then the taxpayer can not request for a settlement after the assessment has been made.
In cases involving tax evasion, a request for settlement may be submitted.
3. INITIATION OF LITIGATION in tax courts: In cases where a taxpayer believes that taxes and/or penalties have been unfairly imposed upon him, he may bring suit against them in the tax courts within thirty days of the date on which he has been notified of their existence.
6.3. Statute 6183 concerning procedures for the collection of public claims
Some of the provisions of this law applicable to the collection of taxes due are summarized below.
a) In situations involving penalties for tax evasion, tax authorities may demand submission of guarantees.
b) In cases where guarantees are demanded (and in a few other situations), the taxpayer's assets may be placed under distraint.
c) In cases where distraint is to be applied as a precautionary measure (and in a few other cases) the tax due may be calculated on a temporary basis.
d) Taxes and penalties may be paid in cash, by check, and by postal or bank transfers.
e) The Ministry of Finance is empowered to determine the rate of interest to be charged on late payments. (Currently this is 144% a year.)
The circumstances under which taxes may be deferred are also indicated in the law mentioned above.
The notification for payment order to be sent to a debtor who has failed to pay his debts and provisions regarding distraint of a debts assets are governed by the same law.
Please do not hesitate to contact us if you need any additional information regarding the matters discussed here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information contact Mustafa Camlica, Tax Manager on tel: +90 212 232 1210, fax: +90 212 230 8231, or e-mail mustafa.camlica@arthurandersen.com or enter a text search 'Arthur Andersen' and 'Business Monitor'.
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