That the tax administration has prepared a report does not mean that all of its findings have become final. Nor does the taxpayer's denial of a transaction by itself invalidate the tax assessment. The actual nature of the event that gives rise to the tax, the allocation of the burden of proof according to the specific claim, and the court's duty of ex officio investigation (re’sen araştırma) are assessed together. An effective file links each legal claim to a specific record that confirms it and to a clear request. 1 2
The evidentiary debate does not consist only of the attachments to the petition. Statements given during the audit, book and document submission records, the administration's defense, reports obtained later and the court-appointed expert's assessment are all parts of the same dispute. What was known at which stage of the case, and which evidence could be answered, is important. The method below explains how evidence in a tax dispute should be organized and discussed, rather than repeating general litigation procedure. For the relevant process, the article on how a tax lawsuit is filed may also be consulted.
Who bears the burden of proof in a tax case?
Article 3/B of the Tax Procedure Law No. 213 (VUK) bases taxation on the real nature of the event. Where an unusual situation is asserted that does not comply with economic, commercial or technical requirements, the burden of proof on that assertion arises for the party raising it. This provision cannot be read to mean that the burden of proof always rests on the taxpayer or always on the administration. The fact in dispute and the tax rule to be applied must be identified first. 1
The administration must set out the event and the calculation on which the assessment is based. The taxpayer, for its part, must explain the legal conditions of the deduction, exemption or expense it wishes to rely on and must submit the relevant records. If an alternative economic explanation is put forward against the administration's specific findings, that explanation must be documented. Merely referring to the other party's burden of proof does not justify the failure to submit favorable records.
How should an “unusual transaction” claim be argued?
The reason why the transaction is regarded as unusual must be made specific. The sector, the commercial period, the relationship between the parties, the payment method and the conditions of performance may be assessed together. A business operating at a profit margin different from the general average does not, by itself, show the amount of unrecorded gross receipts. On the other hand, if no contract or record explains the unusual movement, the taxpayer's defense may be weakened.
Rather than only using the phrase “the normal course of commercial life,” the defense should set out the contractual term, the market situation and the actual record. If the claim is production loss, discount, return or uncollectability, documents from the relevant period should be shown. Whether a later explanation is confirmed by records made at the time is discussed separately.
Which evidence may be used?
Under VUK Article 3/B, all types of evidence other than an oath may be used. A witness statement that has no natural and clear connection to the event giving rise to the tax cannot be used as a means of proof. This provision does not mean that the abstract account of any person is sufficient. The source of the declarant's knowledge of the transaction, the date on which the declarant observed what they describe, and the consistency of the statement with the records must be assessed. 1
In tax proceedings, the written procedure is the rule. For witness testimony to have evidentiary value in a tax case, it is not necessary that the procedure for hearing witnesses in civil courts be applied in the same way. When a written statement, a minute or testimony from another file is submitted, the way it was obtained and its connection to the event must be shown. The investigative step expected from the court must also be set up in a form that can be lawfully carried out. 2 For details on this subject, see the article on objecting to a tax inspection report.
How should bank records be presented?
Bank movements are classified by date, amount, sender, recipient and description. Sales collections, loans, capital, transfers and refunds should not be accepted together in the same list as total gross receipts. The type of a transaction, however, cannot be determined only by the heading given by the person preparing the file. The classification must be shown with its contractual and accounting basis.
It should be checked whether a movement has been counted twice in different tables. If a bulk payment relates to several invoices, a reconciliation table is prepared. If there is a payment without an explanation, the reason it belongs to a specific transaction must be shown through other records. Submitting an auditable explanation table alongside the raw bank statement makes it easier for the court to follow the amounts and the connections.
How can the reliability of commercial and electronic records be protected?
Invoices, contracts, dispatch and delivery records, stock movements, production records and correspondence should corroborate one another. Where possible, the original electronic file, its date information and its link to the relevant transaction should be kept. If only selected screenshots are submitted, an objection that the context is incomplete may be raised. Where necessary, a technical examination that can verify the integrity of the record should be requested.
Using findings obtained unlawfully as evidence is assessed separately under Article 38 of the Constitution. While trade secrets and personal data are protected, the information necessary to resolve the dispute must be submitted to the competent authorities through the proper procedure. Unnecessary copying of data of unrelated third parties may be avoided; however, concealing or altering records that affect the outcome is not a method of defense. 3
Does ex officio investigation make it unnecessary for the taxpayer to submit documents?
No. Under Article 20 of the Administrative Procedure Law No. 2577 (İYUK), the court has the power and duty to carry out the examination necessary to clarify the dispute and to request information and documents. This duty does not mean that the parties may wait without setting out their claims or submitting the documents they hold. The court should be told precisely which document it should request from which institution and why. 2 For details, see the article on the consequences of failing to present books and documents.
If the basis of the assessment is a report, the report should be requested; if a bank movement is missing, the statement for the relevant period should be requested; if delivery is disputed, the specific transport or warehouse record should be requested. The document name, date range, relevant transaction and the fact to be proven should be stated. If the court has not responded to an interlocutory decision, the petition should explain how the missing item affects the outcome and request that it be completed. This topic is also addressed in the article on what to do if the tax technical report is not served.
The court's investigation runs within the legal framework limited to reviewing the reason for the administrative action. Information that emerges in the case later and the grounds that existed on the date the action was taken must be assessed in relation to each other. Whether the new explanation put forward by the administration in its defense explains the original reason, or introduces a different ground for the action, should be assessed on the facts of the file.
When is an expert examination needed?
An expert examination may be useful in disputes requiring technical or specialist knowledge, such as accounting, production, stock, cost and electronic record issues. The legal qualification and the applicable law are the court's responsibility. The expert examination procedure applied through Article 31 of İYUK should not be used in a way that leaves the legal decision to the expert. 2 4
The request should not be limited to the appointment of an expert. It should state which account should be examined, the discrepancy in the data used and the technical questions to be answered. Separate questions may be put for separate problems, such as VAT transfers, double counting, unit cost, stock quantity or the bank movement reconciliation. The expert's field of expertise should match these questions.
How should an objection to an expert report be made?
An objection should be built on missing data, the wrong period, a flawed method, an arithmetic error, an unanswered question or an internal contradiction within the report. That the result is unfavorable is not by itself a ground for objection. The page and table objected to should be shown, and it should be explained which data could produce the correct calculation. The need for a supplementary report or a new examination should also be made specific. For a detailed assessment, the article on taxpayer rights in a tax audit may be used.
Under HMK Article 281, the Code of Civil Procedure No. 6100, a two-week period applies to objections to the expert report, and a single additional period of no more than two weeks may be requested when its conditions are met. In tax proceedings, the reference through İYUK Article 31 and the court's notification should be assessed together. The fact that a request for additional time went unanswered does not mean that the period has been extended. 2 4
How should late-submitted evidence be answered?
The conditions for admitting documents submitted later under İYUK Article 21, and their notification to the other party, are assessed. The reason why the late evidence could not be provided earlier must be explained. As to a new document submitted by the administration, it should be stated whether the integrity of the record is intact, which claim it changes, and what examination is needed to respond to it. 2
Equality of arms and adversarial proceedings require an effective opportunity to respond to the decisive claims and evidence on which the judgment will be based. For a report or attachment that was included in the file but cannot be read, or for which only the conclusion section was provided, a specific request for access should be made. Rather than a general objection that the fair-trial principle was breached, the record should state which document could not be answered and for what reason. 3
How should the evidence file and the requested outcome be structured?
Start with a list of transactions and periods. For each claim, the supporting record, the contrary finding and the requested investigation should be shown separately. The petition should state not only the name of the evidence but also the fact it is intended to prove. The link between the disputed amount and the calculation should be established. If there is a partial dispute, the scope of the request should be kept clear.
- The notice of assessment, the notification record and the list of the tax and penalties in dispute.
- The inspection report, the minutes and their supporting annexes.
- A claim-to-evidence matching table and a calculation check table.
- The documents the administration or third parties are asked to produce.
- The technical questions to be put to the expert and the unanswered points.
The court's decision should make clear why the basic claims and evidence that affect the outcome were accepted or rejected. It is not, by itself, a lack of reasons if not every sentence receives a separate answer; however, if a specific objection that could change the result is not discussed, that should be clearly shown in the appeal. An appeal or petition for review should explain which decisive point the decision failed to consider, rather than repeating the earlier text word for word. 2 3 For a separate treatment of this subject, see the article on appeals and cassation in tax litigation.
Conclusion
In a tax dispute, proof depends on the relationship between the evidence and the dispute before it depends on the number of pieces of evidence. The burden of proof must be determined according to the specific claim; bank, commercial and electronic records should be assessed together. Ex officio investigation and expert examination should be guided by specific questions, the right to respond to documents submitted later should be exercised, and the requested outcome should match the calculation made.
Frequently Asked Questions
Does the burden of proof always rest with the taxpayer?
No. As explained in the section “Who bears the burden of proof in a tax case?”, it is determined by the fact in dispute and the provision applied. Back to the relevant explanation
Can I refrain from submitting documents because the court will investigate?
This approach may cause loss of rights. The specificity and document-submission approach described in the section “Does ex officio investigation make it unnecessary for the taxpayer to submit documents?” should be followed. Back to the relevant explanation
Is an expert examination mandatory in every tax case?
No. It is assessed according to the need for technical expertise explained in the section “When is an expert examination needed?”; the legal decision belongs to the court. Back to the relevant explanation
Is it enough to say that I do not agree with the expert report's conclusion?
No. It does not form a technical objection in itself. The data-, method- and calculation-focused explanations set out in the section “How should an objection to an expert report be made?” must be provided. Back to the relevant explanation
Sources and legal bases
- Law No. 213 on Tax Procedure (Vergi Usul Kanunu), Articles 3 and 134. Source text
- Administrative Procedure Law No. 2577 (İdari Yargılama Usulü Kanunu), Articles 1, 3, 16, 20, 21, 24 and 31. Source text
- Constitution of Türkiye, Articles 36, 38 and 141. Source text
- Code of Civil Procedure No. 6100 (Hukuk Muhakemeleri Kanunu), Articles 266 and 281. Source text