On Thursday, 28 July 2022, Law No. 153 of 2022 (the "Law") to override overdue fines and additional tax fees and to renew Law No. 79 of 2016 concerning tax disputes was enacted and published in the Official Gazette. The new Law waives fines imposed for the late payment of said tax dues and aims to alleviate financial burdens on taxpayers while simultaneously helping the state to accelerate the collection of delayed tax dues and curbing the impact of COVID-19 by enabling the government to introduce public services and tackling the social and economic impacts of the pandemic.

The Law introduces new tax facilities for financiers and taxpayers providing a 65% deduction on delay penalties and additional taxes stipulated in various fee and tax laws, i.e.:

  • Customs Law No. 66 of 1963 and Customs Law No. 207 of 2020;
  • Stamp Tax Law No. 111 of 1980;
  • Law No. 147 of 1984 on Imposing a Fee for Developing State Financial Resources;
  • General Sales Tax Law No. 11 of 1991 and Value Added Tax Law No. 67 of 2016;
  • Income Tax Law No. 157 of 1981 and Income Tax Law No. 91 of 2005; and
  • Tax Law on Built Real Estates No. 196 of 2008.

Accordingly, early tax payment would help taxpayers to benefit from the approved provisions to override 65% of delay fees and additional taxes if the due principal taxes or fees are paid before the date of enacting the Law or the effective date established in the Law, i.e. 31 August 2022 and provided that the taxpayer pays the remaining 35% until 1 March 2023.

The law furthermore extends the current Law No. 79 of 2016 regarding the termination of tax disputes until December 31, 2022, thus keeping the legal position of taxpayers intact.

The law is in accordance with the state´s endeavor to improve the tax system, alleviate the financial burdens on the business community and reduce their financial tax burdens whilst simultaneously facilitating tax compliance, advancing the national economic development, and stimulating investment. Furthermore, the government aims to mitigate the negative effects of the current global crisis, caused by COVID-19 and the Ukraine war.

We, therefore, encourage businesses to make quick use of the new Law to guarantee timely compliance and benefiting from the tax waiver.

Originally published 2 August 2022

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