Pursuant to Article 27 of Law No. 7194, the abrogated Article 379 of the Tax Procedure Law has been redesigned to include a new article titled “Withdrawal of Appeal.
By virtue of this amendment, with relation to decisions rendered by tax courts or regional administrative courts that are currently under appeal, taxpayers may pay their tax dues subject to different discount rates by submitting a petition to the relevant tax office within the time limit to apply for such legal remedy requesting withdrawal of the legal remedies applicable to the total tax dues and/or penalties that are the subject matter of the lawsuits.
The new legislation will only be applied to tax lawsuits pending in regional administrative courts and the Council of State. Decisions reversing decisions rendered by the Council of State are outside of the scope of the new amendment.
The date the withdrawal petition was submitted to the relevant tax office is considered the withdrawal date, and the relevant tax dues will accrue on such date. A 20% discount will be applied to tax dues and penalties if 80% of the tax dues and penalties, including their delay interest, is fully paid within one month of the accrual date. This discount will not apply if the tax principal is upheld by the court.
If the tax due is abrogated by the court of first instance or the regional administrative courts, the taxpayer may be released from the tax due by paying:
- 60% of the total abrogated tax due for the tax principal (48% if the payment is made in one month);
- 0% of the tax loss penalty related to the abrogated tax principal;
- 25% of the tax loss penalty if the principal tax is not brought before the court or fined for participating in tax fraud (20% if the payment is made in one month), or
- 25% of the irregularity penalty and/or special irregularity penalty (20% if the payment is made in one month).
If the tax due is approved by the court of first instance or the regional administrative courts, the taxpayer may be released from the tax due by paying:
- 100% of the total approved tax due for the tax principal
- 75% of the tax loss penalty related to the approved tax (60% if the payment is made in one month)
- 75% of the tax loss penalty if the principal tax is not brought before the court or fined for participating in tax evasion (60% if the payment in made in one month), or
- 75% of the irregularity penalty and/or special irregularity penalty (60% if the payment in made in one month)
If a legal remedy is withdrawn within the context of Article 379, the delay interest that will be applied to the tax dues is regulated in the Article 112 of the Tax Procedure Law. The delay interest will be applied to the tax dues at a rate equivalent to the late fees determined under Law No. 6183. The delay interest will begin accumulating on the due date specified in the particular laws and will span for the relevant period related to the assessment, ending on the date the withdrawal petition is submitted to the tax office.
Any delay interest or late fee payments made prior to the accrual date will be deducted from the amount accrued according to this amendment.
In the event that the legal remedy is withdrawn by the taxpayer, the tax administration will not be able to maintain the dispute. If applications are made to the regional administrative courts or the Council of State in spite of the taxpayer’s withdrawal of their legal remedy, such applications will not be examined.
Any litigation expenses, attorney fees, and secondary fees ruled by the court with regard to the withdrawn lawsuit cannot be demanded by the parties and cannot be subject to execution proceedings.
The new legislation will come into force on 01.01.2020.