Global economy and technology has changed and witnessed significant developments in the last quarter of past century. Classical business and commerce patterns have been changed. An environment has been formed in which business, marketing and accounting procedures are reviewed; output and capital market competition has intensified; radical changes on both private and public sector have become unavoidable. Development on information and communication technologies is the reason of rapid and versatile changes that continues nowadays. Rapid improvements on information technologies and economic globalization have caused widespread of internet commerce. Basis of the global economy is accumulation of knowledge and brain power is its measurement. It is certain that countries and companies which has no accumulated knowledge will be out of this rapidly developing environment. In this frame, countries which adapt their technologic, institutional and legal infrastructure to this new conjuncture would be succeed in first quarter of third millennium.
It is observed that Turkish Ministry of Finance improves its technologic infrastructure, develops risk analysis methods and tools to ease selection for tax inspection purposes. These developments are and will be influencing our daily business lives as frequent and multiple tax inspections.
There are many factors have a role in order to be chosen for tax inspection; analyzing tax payer’s activities as per groups and sectors, making comparisons and determination of risk zones over Risk Analysis System created by collection of any kind of information, data and statistics is emerging as an important tool. Third party information (tittle deed, bank, cross inspection) become significant in terms of selection for tax inspection since the determination of tax payers or/and sectors ranked in the high risk group of tax loss or evasion is preferred.
Lastly, Ministry of Finance have made new regulations and imposed additional obligations within the scope of studies for monitoring electronic commerce activities regarding to imposing obligation for specific taxpayer groups to provide information on regular basis and change over to e-archive implementation for taxpayers who makes sale on the internet.
In this article, information about e-archive implementation is shared briefly then we make evaluations regarding to obligation for provide information on regular basis in consideration of the latest regulations.
A-Briefly E-Archive Implementation:
E-archive implementation had been regulated just after e-invoice obligation had been imposed with the purpose of prevention informality and harmonization of taxpayer with tax laws.
E-archive implementation allows for issuing invoices on electronic environment as well as preserve and submit its second copy which must be issued, preserved and submitted in paper format as per Turkish Tax Procedures Code. In this implementation, document which sent to its recipient in paper or electronic format is deemed as original whereas electronic one which preserved on electronic environment is deemed as second copy.
Being registered to e-invoice implementation and having permission for e-archive are the preconditions in order to benefit from e-archive implementation.
Taxpayers who sell products and goods on the internet and have gross income equal to TRY 5 Million and above in gross income statements of the 2014 fiscal period were obliged to use e-archive implementation by January 1st, 2016 at the latest. Other taxpayers out of the scope have no obligation to use e-archive but have right to use e-archive optionally by applying for it.
This time however, taxpayers who sell products and goods on the internet and have gross income equal to TRY 5 Million and above in gross income statements of 2015 and following fiscal periods are obliged to use e-archive. Mentioned taxpayers must complete their application process and actual changeover preparations within the framework of determined procedures and principles until the beginning of the following fiscal period in which the income or corporate tax return is filed for that related fiscal period.
In this context, taxpayers changed over to e-archive implementation should transmit their e-archive invoices belongs to sales on internet and include required information on these invoices as per related regulations.
B- e-Archive System Operation:
Taxpayers can use e-archive implementation in two ways. Either their own data processing (ERP) system or special integrator’s data processing system permitted by the Turkish Revenue Administration.
Taxpayers who wants to use the implementation over their own ERP system should apply to the Revenue Administration. Real and legal persons can issue e-invoices by certifying it with qualified electronic signature or fiscal stamp, in case of application is granted by written permission for e-archive.
Taxpayers can also use e-archive through special integrator’s data processing system by applying to special integrators instead of making any application to the Revenue Administration by themselves. Those tax payers will be able to demand special integrator’s fiscal and time stamps in order to use on invoice and electronic archive reports.
Delivery of invoices issued within the framework of e-archive should be made as following;
• Tax payers permitted to benefit from e-archive implementation must issue invoices to the other taxpayers registered to e-invoice implementation in e-invoice format, preserve and submit it on demand. Invoice to be issued must be in e-invoice format in case both vendor and purchaser are registered to e-invoice implementation. Second copy of this issued electronic invoice will be preserved on electronic environment and submitted on demand by the Tax Authority.
• Tax payers permitted to benefit from e-archive implementation must issue invoices to the other taxpayers not registered to e-invoice implementation within the scope of e-archive format, preserve and submit its second copy on demand. However, deliveries of invoices issued within the scope of e-archive to the other taxpayers not registered to e-invoice implementation will be made in paper format.
• Tax payers permitted to benefit from e-archive implementation must issue invoices to the persons who are not taxpayer within the scope of e-archive format, send in electronic or paper format depending on the demand of customer, preserve and submit its second copy on demand. Invoices issued within the scope of e-archive implementation to non-taxpayers can be delivered in electronic or paper format depending on the consent of customer. Invoices can be delivered through any kind of electronic environment and tools including internet in case demanded by customer who is not a taxpayer.
Tax payers and special integrators received permission for e-archive must certify e-archive report concerning documents issued on electronic environment and which is compatible with data format and standard published on www.efatura.gov.tr by using their fiscal stamps or qualified electronic signatures then send it to the Administration’s system through explained methods in e-archive guides.
Revenue Administration have the authority to make below mentioned decisions in condition of send written notification and grant sufficient time for preparation;
• Change data transfer time for reports, determine different data transfer time and method as per taxpayer groups and sectors.
• Demand remote access for e-archive reports and documents archived on electronic environment.
• E-archive implementation provides huge savings on time, workforce, archiving and will reduce the archiving costs.
This implementation will free organizations from paper archiving burden and provide rapid access to required documents.
C- Imposed Obligatory to Provide Information On Regular Basis:
As per Tax Procedures Code General Communiqué No: 464 published on the Official Gazette on December 24th, 2015; following organizations are imposed obligatory to provide information on regular basis regarding to electronic commerce and other commercial activities within the scope of studies for monitoring the electronic commercial activities:
• Intermediary Service Providers,
• Online Advertisement Service Intermediaries,
• Cargo and Logistic Operators,
This obligation will be effective as of July 1st, 2016.
D- Information Required From Obligated Organizations:
1- Intermediary Service Providers:
As per the Law Concerning Regulation on Electronic Commerce No: 6563; “intermediary service providers” are defined as real or legal persons who provides electronic commerce environment for making economic and commercial activities which belongs to others.
Providers of intermediary services with the purpose of mediating to purchase, sale, rent or distribution on the internet should transmit the data of realized transactions over BTRANS (Ministry of Finance Revenue Administration Data Transfer System) to Revenue Administration on electronic environment for each month in a calendar year.
Data demanded from Intermediary Service Providers are as follows;
• Internet address or addresses which the intermediary services provided,
• Name surname/legal name, Turkish Republic Identification Number (TCKN)/Tax Identification Number (VKN) information along with office address of real or legal persons whom the intermediary services provided,
• Collected amount and collection date for each realized sale/rent of goods and services in the name of persons whom the intermediary services provided,
Due to intermediary service provider is commercial representative related seller/lessor, payment could be done by intermediary service provider itself or payment service could be get from another institution. However, data transfer liability of intermediary service provider will not be affected and must be fulfilled.
Additionally, extra information demanded from intermediary service providers as per the Law Concerning Regulation on Electronic Commerce No: 6563 are below provided:
1. Provides information prior to forming contract by using electronic communication tools;
• Up-to-date and easily accessible introductory information,
• Information regarding to technical steps in order to form the contract,
• Information about whether the contract text will be kept, accessible by customer and how long this access will last after the contract is drawn up,
• Information regarding to technical tools in order to use for crystal clear determination and correction of data input faults,
• Information regarding to applied confidentiality rules and dispute resolution mechanisms if any,
(2) Provide information regarding to related professional chamber along with code of conduct and how to reach these code electronically, if any.
(3) Parties may decide on the contrary provided in first and second sub clauses in case parties are not consumers.
(4) Intermediary service provider enables customer to keep contract provisions and general terms.
(5) First and second sub clauses does not apply to contracts which formed exclusively by e-mail or similar communication tools.
Banks operating as per Banking Law No: 5411 are required to provide information regarding to sale and rent payments made on internet within the scope of obligation. Hereunder, banks should transfer the required information periodically over BTRANS (Ministry of Finance Revenue Administration Data Transfer System) to Turkish Revenue Administration.
3- Online Advertisement Service Intermediarie
Information regarding to advertisement services provided for each month in a calendar year should be transmitted over BTRANS (Ministry of Finance Revenue Administration Data Transfer System) to Revenue Administration on electronic environment by intermediaries who mediates commercial advertisement services on internet environment.
Information demanded from online advertisement service intermediaries are as follows;
• Internet address of advertisement and name surname/legal name along with Turkish Republic Identification Number (TCKN)/Tax Identification Number (VKN) information of person or establishment who/which has ownership of this internet address,
• Name surname/legal name information of real or legal person advertisers,
• Collected advertisement service fee.
Each intermediary will provide information for its own part in case of more than one intermediaries for realize advertisement services.
4- Cargo And Logistic Operators
Cargo operators: It is a business which has the right to use of independent place of work and taking cargos with the purpose of deliver to addressee in short time as well as undertaking services such as loading, unloading, storage, stowing, transfer, transporting, delivering under its own supervision and assuming responsibility.
Logistic operators: It is a business which does transporting services on its own behalf along with taking its client’s property by having the right to use independent place of work in order to undertake services such as loading, unloading, storage, stowing, packing, tagging, sale, marketing order planning, distribution, supplying, transporting and similar ones under its own supervision.
As per Road Transport Regulation; information regarding to deliveries made by cargo and logistic operators within the scope of their M1, M2 and M3 licenses are required to be transmitted over BTRANS (Ministry of Finance Revenue Administration Data Transfer System) to Revenue Administration on electronic environment for each month in a calendar year.
Information demanded from cargo and logistic operators are as follows;
• Name surname/legal name and TCKN/VKN information of sender, Name surname/legal name and TCKN/VKN information of intermediary service provider is also required in case of deliveries made by intermediary service providers,
• Quantity delivered on the basis of sender, (Number of deliveries over the determined limit by Administration will be reported.)
• Total number of payment at the door, payment method and total payment amount on the basis of each sender,
Cargo and logistic operators will accept commercial deliveries together with their substitutive documents (invoice, consignment invoice, expense note, delivery note etc.) and attach to delivery as to submit it if demanded during transportation.
Information belongs to cargo deliveries made in the name of administrations, institutions and organizations, institutions publicly shared in administration or in capital, professional organizations with public institution status, diplomatic missions listed on the attached list to Finance Management and Control Law No: 5018 is not required to be transmitted.
Data format and standard regarding to required information to be given by taxpayer groups who are imposed obligatory for providing current information will be announced over BTRANS. Data will be transmitted to Administration over this system. Taxpayers included in the scope of obligation should complete their BTRANS application before the first data transmit date.
Required information within the scope of Tax Procedures Code General Communiqué No: 464 will be transmitted on monthly basis. Information regarding to a month must be transmitted until 24:00 of last day of the following month.
Obliged taxpayers will prepare required information of transactions to be realized as of July 1st, 2016 within the scope of obligation and send it as of following month.
Changes on data format and standard such as addendum, omitting, determination of mandatory field will be announced over BTRANS.
B- Responsibility and Penal Consequences:
It is stated in the Tax Procedures Code General Communiqué No: 464 that taxpayers imposed obligatory to give information required to be transmitted to the Administration system must preserve the information on electronic environment within the preservation periods which are set forth for ledger, records and documents in Tax Procedures Code (5 years) and if required submit it by way of electronic tools and environments.
Furthermore, taxpayers imposed obligatory to give information are responsible of exactness of information sent to BTRANS and obliged to transmit required documents in accordance with format, standard and transmit method determined by the Administration. Information and documents sent in any format, standard and transmit method other than determined ones by Administration will not be accepted and deemed unsent.
Penalties provided in the Tax Procedures Code will be applied in respect to acts committed for those who does not comply with obligations imposed by Tax Procedures Code General Communiqué No: 464.
Accordingly as per duplicate Article 355 of the Tax Procedures Code; it is ensured that TRY 1.370,00 special irregularity fine will be applied for 2016 to corporations who does not comply with imposed obligations by Articles 86, 148, 149, 150, 256, 257 and duplicate Article 257 of the same law.
However, special irregularity fine is not applied in case of notices and forms submitted within 10 days after the end of determined periods and is applied at rate of 1/5 in case of submission is made 15 days following the end of determined periods with regard to notices or forms which are obliged to submit on electronic environment. Extra penalties with regard to first degree irregularities provided in 1st sub clause of Article 352 and with regard to second degree irregularities provided 7th sub clause of Article 352 will not be applied in case penalty is applied as per duplicate Article 355 to those who does not comply with obligation to submit return, notice and form on electronic environment.
Although taxpayer groups who are obligatory to use e-archive implementation with Tax Procedures Code General Communiqué No: 464 have not been extended as per sectors and business activities, the scope of application has been tried to extend by including taxpayers who sell product and service over internet and has TRY 5 Million gross sales revenue in 2015 and following fiscal years.
As per same Communiqué; providing information on regular basis regarding to electronic commerce and other commercial activities by intermediary service providers, banks, online advertisement service intermediaries, cargo and logistic operators has been imposed as obligation within the scope of studies for monitoring the electronic commercial activities. Mentioned obligation will be in force as of July 1st, 2016. It is understood that revenues derived from foreign based electronic commerce activities are being tried to comprehend by this regulation made.