Voluntary disclosure and correction (pişmanlık and ıslah) in tax is a route under which, for taxes based on a return, if the taxpayer voluntarily reports a violation that has caused a tax loss and fulfills the conditions in Article 371 of the Tax Procedure Law, a tax loss penalty is not imposed. Merely filing a petition is not enough: the timing of the application, the filing or correction of the necessary returns, and the payment conditions are assessed together.
Noticing an incomplete return does not mean that the voluntary disclosure route is open in every case. Circumstances such as a prior third-party report on the same matter, an examination that has begun for the relevant type of tax, referral to the assessment committee or the detection of an act of smuggling may change the outcome. Preparing a chronology of events before the application is therefore important.
For which taxes and violations does voluntary disclosure apply?
Article 371 of the Tax Procedure Law (VUK) concerns violations that call for a tax loss penalty in taxes based on a return. Incomplete returns, or returns not filed at all, in taxes such as income tax, corporate tax or VAT can be assessed within this framework. The return and payment regime of the specific tax must be examined separately; property tax is expressly outside the scope.
Voluntary disclosure is not a tax amnesty or an installment plan. The tax debt and the liability for the statutory surcharge continue. It also cannot be said that all irregularity penalties and special irregularity penalties are removed. Which penalty may apply to which act is assessed together with the relevant special provisions and the rules on the combination of penalties.
Is a correction return the same as voluntary disclosure?
A correction return is the instrument that changes the information in a return filed earlier. Voluntary disclosure, on the other hand, is a separate regime that determines under what legal conditions that correction, or the original return, is made. Not every correction return counts as voluntary disclosure; nor does every return filed after the deadline automatically produce a penalty-free result.
Completing an incomplete return that increases the tax debt must be distinguished from requesting a correction in order to recover overpaid tax. In the second case, the VUK provisions on the correction of tax errors and, where necessary, the complaint route may come into play. Which route to choose should not be decided merely by ticking an option on an electronic screen.
What circumstances bar a voluntary disclosure application?
The Law attaches importance to the taxpayer actually reporting the violation voluntarily. If a third-party report with the characteristics set out in the Law about the same event has entered the official records before the date of application, protection may be barred. The taxpayer’s not being aware of that report does not by itself remove the condition.
To what extent does a tax examination create a bar?
The application must be made before an examination begins concerning the type of tax to which the reported event relates. Because of the regulation amended in 2021, it is not correct to treat the existence of an examination in any type of tax as an absolute bar for all types of tax. Nevertheless, the scope and start of the examination and the connection with the event must be determined from concrete documents.
For example, in a hypothetical case in which an examination is under way only for corporate tax, the possibility of an application relating to a different type of tax is investigated separately. This example does not mean that voluntary disclosure is necessarily available for VAT; no conclusion can be reached without examining the scope of the examination assignment, other bars and the detection of smuggling.
Why do referral to the assessment committee and the detection of smuggling matter?
The notification must be made before the event and the relevant type of tax are referred to the assessment committee (takdir komisyonu). In addition, there is a requirement to give notice before the detection of the acts within the scope of Article 359 of the VUK. The thought “the notice of assessment has not come yet” does not show that these conditions are met; the notice of assessment may be issued at a stage later than the events that create the bar.
If an invitation to explain (izaha davet) letter or a preliminary finding letter under Article 370/b has been served, the bar on voluntary disclosure limited to the finding that is the subject of the letter is also assessed separately. It cannot be accepted that a letter requesting information produces the same result in every case; the real legal nature of the letter must be determined.
How do the fifteen-day filing and payment conditions apply?
Returns that have never been filed must be filed within 15 days starting from the date of notice. An incomplete or incorrect return must be completed or corrected within the same period. For overdue taxes there is a condition that they be paid together with the voluntary disclosure surcharge, again within 15 days starting from the date of notice. The relevant provisions of the VUK apply in calculating the period.
| Check | Document to examine | Principal risk |
|---|---|---|
| Date of notice | Petition or electronic application receipt | Wrongly accepting the starting point |
| Return and correction | Approved return, period and tax code | Wrong period or missing type of tax |
| Accrual | Accrual slip, calculation of the voluntary disclosure surcharge | Not tracking the tax and the surcharge together |
| Payment | Collection record and account matching | Payment to the wrong debt or an incomplete amount |
| Previously begun act | Records of examination, referral, third-party report and service | Application conditions not being present from the start |
If the application and the return were filed on different dates, it is not safe to start each period from the date of the return. The date of notice must be determined. If a problem arises between giving the payment instruction to the bank and the payment reaching the tax account, the situation should be checked immediately with the receipt and transaction records.
The voluntary disclosure surcharge is calculated by reference to the late-payment surcharge rate in Article 51 of Law No. 6183. Changes in the rate and the months or fractions of months of delay are taken into account. Using the amount in an old example found online directly may lead to loss of protection through underpayment. The position of a tax that has not yet fallen due must be assessed together with its own payment regime.
How should the application and document file be prepared?
First, it must be determined in which accounting periods and which types of tax the error had consequences. The omitted recording of an invoice may require correcting more than a single return; amounts carried forward to following periods and linked returns must be checked. Changing an accounting entry and correcting a tax return are separate acts.
In the application, the taxpayer’s details, the relevant periods, a summary of the violation and the intent to make a voluntary disclosure must be clear. The approval of the electronic return and the selected type of transaction should be checked; it must not be forgotten that a draft record is not a submitted return. The application, return, accrual and payment documents should be kept in the same file.
At which points should the financial adviser and the lawyer work together?
Financial calculation, effects across periods and electronic filing are at the center of the financial adviser’s (mali müşavir) work. The examination or third-party report bar, a possible allegation of smuggling, the effect of the return on the right to sue and the choice of legal route require a separate legal assessment. Explanations in the same file must not contradict one another.
Without it being established that the amount to be declared is materially correct, accepting all disputed items merely to benefit from the penalty advantage may not be appropriate. The choice between a voluntary compliance act and the defense that there is essentially no debt should be made after seeing the evidence and consequences.
What happens if the conditions are not fulfilled?
Breach of any one of the filing, correction or payment conditions may lead to loss of the protection of voluntary disclosure and to application of the relevant penalty provisions. In that case the type and amount of the penalty depend on the nature of the application and the circumstances of the specific event. It cannot be said that the same penalty will be imposed in every failed application.
A return filed by way of voluntary disclosure does not mean that the taxpayer can never be examined again. The administration may examine the scope and accuracy of the notice. Action may also be taken separately for other violations that were not reported. Therefore, closing only a particular difference without checking the related records may conceal continuing risks.
If there are payment difficulties, an application for general deferral or installments should not be seen as a solution that of itself changes the 15-day payment condition of voluntary disclosure. The financing plan should be prepared before the application; one should not rely on a later application to preserve the period.
How does voluntary disclosure affect criminal proceedings and the right to sue?
Article 359 of the VUK contains a special provision for those who make a notice in accordance with the voluntary disclosure conditions in Article 371. However, this consequence is assessed only for a notice whose conditions are actually met. Not every return made after an examination has begun or after an act of smuggling has been detected removes criminal liability. Other mechanisms for reduction in a criminal investigation or prosecution should also not be confused with voluntary disclosure and correction.
The limit on filing a case against the tax base the taxpayer declared and the tax assessed on that base is regulated in Article 378 of the VUK; the provisions on tax errors are reserved. The relationship between a reservation of rights (ihtirazi kayıt), voluntary disclosure, correction and a judicial application should be examined according to the characteristics of the file and the relevant case law. The approach “I will declare and pay, then in every case I will get it back” is not safe.
If a penalty or another act is served, the application and case time limit specific to that act is tracked separately. It cannot be assumed that a petition of explanation concerning the voluntary disclosure file stops the period for every act served later.
Related articles: What Is an Invitation to Explain in Tax? Explanation, Documents and the Next Stage; Voluntary Tax Disclosure (Pişmanlıkla Beyan): Conditions, the Fifteen-Day Period and Penalty Application; Voluntary Disclosure Returns: Conditions, the 15-Day Period and Tax Penalties; Tax Penalty Reduction: Application, Reduction Rates and Payment Conditions Under Article 376 of Tax Procedure Law No. 213.
Conclusion
The benefit of voluntary disclosure and correction depends on using it at the right time and with all conditions completed. Before the application, the status of examinations and third-party reports must be investigated, the type of tax and the periods correctly selected, and the 15-day filing and payment calendar prepared together. For items alleged not to be owed in reality, the effect of the return on the right to sue must be assessed separately.
Frequently Asked Questions
Does every correction return count as voluntary disclosure?
No. A correction is a filing act, whereas voluntary disclosure is a legal regime with its own conditions. The difference is explained in the section “Is a correction return the same as voluntary disclosure?” Related explanation
If there is an examination in another type of tax, is voluntary disclosure definitely closed?
It is not closed in every case; the relevant type of tax, the event and other bars are examined. The distinction in the section “To what extent does a tax examination create a bar?” is important. Related explanation
How long is there to pay under voluntary disclosure?
For overdue tax and the voluntary disclosure surcharge, a 15-day condition from the date of notice applies as a rule. See the section “How do the fifteen-day filing and payment conditions apply?” Related explanation
Does voluntary disclosure remove all penalties?
No. The protection provided in respect of the tax loss penalty does not automatically remove every irregularity or criminal-law consequence. The section “For which taxes and violations does voluntary disclosure apply?” explains the scope. Related explanation
Sources
- Tax Procedure Law No. 213 (Vergi Usul Kanunu), Articles 18, 359, 370, 371 and 378; the GİB legislation text including amendment notes made by Law No. 7338: Source text
- GİB, Guide to the Application of Voluntary Tax Disclosure (Vergilerde Pişmanlıkla Beyan Uygulaması Rehberi), November 2022; an explanatory historical guide, assessed together with the current statute: Source text
- GİB inventory of publications and guides: Source text