Inflation Accounting Confusion, Electronic Listing Verification System, Daily Meal Allowance, and Grant Subsidies
Inflation accounting confusion
During the second provisional tax period of 2024, TÜRMOB took action for the cancellation of inflation accounting, and certified public accountants voiced their objections regarding the heavy workload, stating that deadlines could not be met; however, this found no response from the government side.
Here, the most time-consuming issue was adapting the systems to inflation calculations, running the systems, and performing numerous operations such as reversing records when errors occurred.
The month of August fell like a nightmare upon certified public accountants.
The filing deadline for the provisional tax return was extended 3 times.
Inflation adjustments were made for all companies, records were posted, and tax returns were filed.
At the beginning of September, Mehmet Şimşek made a statement announcing that companies with a 2023 turnover of less than 50 million TRY would not apply inflation accounting, and those that had already filed returns must amend them.
Everything was cancelled from scratch, systems were reverted to their previous state, and tax returns were corrected.
The burden fell entirely on the certified public accountants.
Will companies with a 2023 year-end turnover of less than 50 million TRY perform inflation adjustments at the end of 2024? Will it be cancelled after they do so? Nobody knows.
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Recommendations for inflation accounting.
The following suggestions have been prepared to prevent the emergence of an inflation profit and to avoid paying extra taxes due to inflation.
If you wish to make the company appear more profitable, the opposite of these recommendations should be applied; let us discuss this further.
- Remove fixed assets that do not exist in the company or do not contribute to the company from your records through sale.
- Dispose of any affiliates registered in the company that have no positive impact on the company.
- If you have a company on hand that is inactive but carries high accumulated losses from previous years, liquidate it as soon as possible.
- If you have a receivable from the company, add it to the capital.
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Social Security Institution (SSI) premiums on meal allowances paid to employees
Based on the ruling rendered by the Council of State, meal allowances paid to employees via meal cards will be exempt from SSI premiums (in-kind aid), whereas meal allowances paid in cash will continue to be subject to SSI premium calculations (for the year 2024, set at 23.65% of the daily gross minimum wage, amounting to 157.69 TRY daily).
Council of State 10th Chamber, E. 2023/170 and K. 2024/1853
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Electronic Listing Verification System (EIDS) authorization verification application has been implemented.
With Phase 1 (01.11.2023); identity verification information was implemented for placing real estate advertisements on listing platforms.
With Phase 2 (15.09.2024); authorization verification will be implemented. Real estate advertisements on listing platforms can only be placed by the real estate owner, the owner's first and second-degree blood relatives, spouse, or real estate businesses authorized by the owner holding an authorization certificate. Real estate businesses without an authorization certificate will not be able to enter listings.
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Rental payments cannot be made in cash
Those who make rental payments in cash will be subject to a penalty of 10% of the rental amount, with a minimum penalty of 5,000 TRY.
The penalty will be imposed separately on both the landlord and the tenant.
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Grant support applications for micro and small enterprises in the earthquake region (Hatay, Adıyaman, Kahramanmaraş, Gaziantep) can be submitted until 30.09.2024.
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Project applications for individuals with disabilities and former convicts can be submitted until December 6, 2024.
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Entrepreneurship supports have been updated.
Upper limit is 2 million TRY. Sectors to be supported (According to NACE Code):
61-Telecommunications
62-Computer programming, consultancy, and related activities
63-Information service activities
72-Scientific research and development activities
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Work accident notification
- Immediately... to law enforcement agencies
- Within 3 business days... to the SSI
Since notifications are based on business days, weekends and public holidays will not be counted, whereas administrative leaves will be taken into consideration.
Occurring work accidents shall be reported through the SSI e-vizite program.
Notifications for apprentices, intern students, and İŞKUR trainees shall be made manually in paper format.
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Termination of employment due to absenteeism. Conditions:
- The employee failing to report to work for 2 consecutive days, or twice within a month on the business day following any holiday, or for 3 business days in a month.
- Defense must be obtained from the employee - The employee must not have a justifiable reason for absenteeism.
- Each day of absenteeism must be documented with a written report.
- The employee must be invited to work via a formal notice.
- The termination decision must be notified to the employee in writing and with justification.
- Reports and other documents proving absenteeism must be archived for potential audits.
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Distinction between commercial vehicles and passenger cars according to the Tax Administration
According to tax laws, restrictions apply to the expenses of vehicles classified as passenger cars, meaning their entire expenses cannot be deducted.
Year
Expense Limit (fuel, parking, repair, etc.)
Monthly Rental Expense Limit (TRY)
VAT & SCT Expense Deduction Limit (TRY)
Depreciation Limit (excluding SCT and VAT)
Depreciation Limit (including SCT and VAT)
2021
70.00%
6,000
150,000
170,000
320,000
2022
70.00%
8,000
200,000
230,000
430,000
2023
70.00%
17,000
440,000
500,000
950,000
2024
70.00%
26,000
690,000
790,000
1,500,000
The fact that the relevant vehicle's registration certificate states "commercial" does not change this situation; it must also be considered "commercial" under tax laws.
For example, vehicles starting with customs tariff position code 87.03 are considered "passenger cars" according to tax laws and are subject to expense restrictions, even though they appear as "commercial" on their registration certificates.
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