Guide to Settlement of Tax Penalties: Application, Time Limits, Reduction and Litigation Routes

Settlement of tax penalties (uzlaşma) is an administrative resolution route through which the taxpayer and the administration agree on the amount of penalties that fall within its statutory scope; it does not mean that the tax debt or the penalty is erased entirely in every case. After August 2, 2024, the tax principal (vergi aslı) is outside settlement under the general system; transitional provisions concerning older files are examined separately. In 2026, procedural irregularity penalties (usulsüzlük cezası) and special procedural irregularity penalties (özel usulsüzlük cezası) must exceed 40,000 Turkish lira (TL) on a per-act basis; this threshold is not a general lower limit for tax loss penalties (vergi ziyaı cezası). Before applying, the scope, notification, the time limit for an action concerning the tax principal, the penalty reduction option and the finality of the record to be signed should be assessed together. [1] [2] [3]

Settlement does not by itself eliminate the entire penalty

In tax law, settlement is an agreement between the administration and the taxpayer or the person on whom the penalty is imposed on a penalty amount within statutory limits. It can allow the dispute to be resolved without being brought before a court; it can reduce uncertainty and the need for litigation. However, it is not a system in which a specific reduction rate or the complete removal of the penalty is guaranteed to the taxpayer. Being invited to a meeting does not show that the application has been found justified on the merits, and filing the application does not show that settlement has been reached. [1]

The expression “settlement as one of the circumstances that terminate a tax penalty” should be read with this distinction in mind. The difference between the amount claimed by the administration and the agreed amount may be eliminated; however, if there is an agreed penalty, the obligation to pay it continues. The ending of a dispute through settlement and the ending of a public receivable through payment are not the same legal event. The record, accrual, payment and collection entries should each be tracked separately. [1]

The tax principal, the tax loss penalty, the procedural irregularity penalty, the special procedural irregularity penalty and criminal proceedings concerning the offense of tax evasion (vergi kaçakçılığı) are distinct from one another. Settlement is not a tax amnesty, debt restructuring, an instalment agreement or victim–offender mediation (uzlaştırma) in criminal procedure. First, it should be determined which act and sanction one is facing. The separate settlement regime of the customs administration is outside the scope of this guide. Receiving a payment order or facing attachment does not by itself restart the settlement time limit against a notice of assessment (ihbarname) that was previously missed. [1] [5]

The 2024 amendment separated the legal routes for the tax principal and the penalty

Regarding the tax principal, waiting for the settlement meeting may cause a loss of rights

By Law No. 7524, adopted on July 28, 2024 and published in Official Gazette (Resmî Gazete) No. 32620 of August 2, 2024, the tax principal was removed from the general scope of pre-assessment settlement (tarhiyat öncesi uzlaşma) and post-assessment settlement (tarhiyat sonrası uzlaşma). Under the current rules, the subject of negotiation is penalties that meet the statutory conditions. The tax base, the period or the lawfulness of the tax itself cannot be resolved by reaching an agreement on the tax principal before the commission. [1]

The most important procedural consequence of the amendment is that the time limit for an action against the tax principal is tracked independently of the penalty settlement. Even if the tax and the penalty are shown together on the same notice of assessment, it should not be assumed that a settlement application relating only to the penalty stops or extends the time limit for an action regarding the tax principal. If bringing an action concerning the tax principal is being considered, a separate time-limit plan should be drawn up based on the date on which the notice of assessment was legally notified. [1] [5]

When an action is brought against the tax principal, the settlement option for the penalty within scope may be considered; however, the subject matter and relief sought in the petition and the scope of the application submitted to the commission should not be confused. Signing on the assumption that a previously settled penalty will be automatically refunded if the tax principal is later annulled is not safe. The link between the tax and the penalty, the finality of the record, the reasoning of the decision and the type of act should be examined together. [1]

An old tax period does not by itself ensure that the old regime applies

VUK Transitional Article 35 subjects certain settlement processes that were ongoing on the date the amendment entered into force to the old provisions. Files in which settlement was requested but no date was set, in which a date was set but no meeting had yet taken place or the meeting was postponed, and files in which the time limit for requesting settlement had not yet expired, are assessed separately within the scope of the provision. Application of former Articles 112 and 376 and the related settlement provisions depends on these transitional conditions. [1]

For this reason, the assessment “the tax relates to 2023, so the old system applies” is not sufficient. The tax period and the dates of notification of the notice of assessment, the application, the invitation and the meeting should be established through separate documents. The outcome concerning the tax principal or the payment reduction in a file covered by the transitional provision cannot be carried over unchanged to a settlement file newly opened in 2026. [1]

Which penalties fall within the scope of settlement in 2026?

The basic framework is VUK Supplementary Article 1 and Supplementary Article 11. For tax loss penalties the statutory exceptions are important; for procedural irregularity and special procedural irregularity penalties, in addition to the exceptions, the monetary threshold and the per-act calculation are important. In pre-assessment settlement, the condition of being based on a tax examination is additionally required. [1]

A decision cannot be made by looking at the amount alone. A high special procedural irregularity penalty does not remove a clear statutory prohibition. It is also wrong to treat a low-amount tax loss penalty as outside scope because of the threshold that is specific to irregularity penalties. [1] [2]

Situations under Articles 359, 370 and 153/A should be examined separately

Penalties imposed for causing a tax loss through acts under VUK Article 359, and the related penalties imposed on those who participate in these acts, are excluded from settlement by law. The scope should not be determined only by looking at the multiple of the penalty or the title of the file; the examination report, the notice of assessment and the underlying provision should be read together. Settlement or payment of a tax penalty is not an act that automatically terminates a separate criminal investigation. [1]

In post-assessment settlement, Supplementary Article 1 additionally excludes penalties imposed under Article 370 on taxpayers to whom a letter concerning a preliminary finding was notified under paragraph (b) of that article. It should not be inferred from this that all invitation-to-explain (izaha davet) procedures are subject to the same outcome. It matters under which subparagraph which penalty was imposed. [1]

Article 355 (repeated) provides a prohibition on both Article 376 and settlement for the special procedural irregularity penalty imposed because security requested under the third and subsequent paragraphs of Article 153/A was not provided or completed in time. Therefore, the approach “if there is no settlement, there is always a 75% reduction” is not correct. [1]

The 40,000 TL threshold applies per act; it cannot be confused with the commission’s authority

Under VUK General Communiqué No. 588 (588 Sıra No.lu VUK Genel Tebliği), the relevant settlement threshold is 40,000 TL from January 1, 2026. Since the Law says “exceeding,” a penalty of exactly 40,000 TL does not fall within the scope of settlement on the basis of the amount alone. For procedural irregularity and special procedural irregularity penalties not exceeding this amount, if the other conditions are met, the general reduction rate of 50% is applied increased by 50%, resulting in 75%. This does not mean adding 50 points to 50% and making a 100% reduction. [1] [2]

The calculation is made on the total penalty to be imposed per act requiring the penalty. Adding up all of a taxpayer’s penalty debts arising from different acts does not open each of them to settlement. In a file where the same act relates to more than one document or transaction, which sanction unit is taken as the basis should be clarified through the report and the notice of assessment. [1]

Under Communiqué No. 592, in post-assessment settlement the threshold in force on the date of notification of the notice of assessment is taken as the basis. The penalty amount applicable on the date the act was committed and the temporal determination of the amount used for entry into settlement are different questions. The previous year’s threshold is not automatically applied simply because the violation occurred in that year. [3]

The following figures are only hypothetical examples explaining the calculation: for a 40,000 TL special procedural irregularity penalty meeting the conditions, the 75% reduction is 30,000 TL and the remaining penalty is 10,000 TL. By contrast, for a 40,000 TL tax loss penalty, the increased rate is not applied simply because the amount is low; if the conditions for the general 50% reduction are met, the remaining penalty is 20,000 TL. The examples do not eliminate the tax principal or other payment conditions. [1] [2]

Pre-assessment and post-assessment settlement are not two independent second chances

Applying during the examination and applying after the notice of assessment differ in terms of the level of information and the options available. The choice should not be based solely on the idea that the meeting will take place earlier. The examination report, the lawfulness of the penalty, preparation of an action against the tax principal and the ability to pay should be assessed together. [1] [4]

Application, report and invitation process in pre-assessment settlement

Options should be determined before the examination record is signed

The request may be made from the start of the examination until the final record related to the examination is drawn up. Clearly stating in the examination record that settlement is requested is also important for the purpose of a written application. The application is directed to the relevant tax examiner or the competent unit; a mere oral request or telephone call should not be relied upon. [4]

For persons invited under the special invitation procedure in the Regulation, there is a rule requiring the request to be made within 15 days at the latest from notification of the invitation. This is not a general additional period that every taxpayer may use after any stage of the examination. It should be determined which invitation and application regime applies. [4]

The application should clearly state identity, tax identification number, examination periods, the competent unit, the scope of the request and representation details. The receipt, the electronic submission record or the record containing the request should be kept. Processing of the application does not mean that every penalty is within scope or that the amount requested will be accepted.

A numerical offer should not be assessed before the report has been seen

Proper submission of the report and the invitation is important for being able to prepare explanations. The Regulation contains a provision on sending the report to the commission and the taxpayer at least 15 days before the meeting. Time-limit and invitation provisions that may be seen in older texts should be read together with the annulment decisions concerning them and the current higher-ranking norms; it should not be assumed that the preparation period can be waived in every case. [4]

Whether the act occurred, the correct addressee, tax loss and causation, the penalty calculation, any claim of duplicate sanctions, notification and the provision applicable in time should be examined. Settlement should not be reduced to a meeting in which only the rate is discussed for a penalty whose legal basis has not been read.

The annulment of the restriction based on three months remaining until the statute of limitations should be taken into account

The decision dated December 28, 2022, E.2022/84, K.2022/1553 of the Plenary Assembly of Tax Litigation Chambers of the Council of State (Danıştay Vergi Dava Daireleri Kurulu) concerns the rule in Regulation Article 9/3 that, when less than three months remain until the statute of limitations on assessment, the taxpayer is not to be asked about the request and is not to be invited. The Assembly considered that a final decision annulling an earlier provision of the same nature cannot be rendered ineffective, and rejected the Ministry’s appeal on points of law against the annulment of the regulatory act and the individual act. [12]

The decision requires that the old regulation sentence not be used as a bar to application without taking the annulment into account. However, it does not create an unlimited right to apply after the examination has been completed; nor does it lead to the conclusion that a settlement request stops all statute-of-limitations periods. The specific timing is examined separately. [12]

Written withdrawal is not the same as not attending the meeting

The Regulation provides that a taxpayer who withdraws in writing before the set settlement date is treated as if pre-assessment settlement had not been requested. Whether post-assessment settlement can be used upon the subsequent notice of assessment is assessed according to this manner of termination and the other statutory conditions. [4]

By contrast, if settlement is not reached or cannot be secured, post-assessment settlement cannot be requested for the same penalty. It should not be assumed that the later right to settlement will be preserved by not attending the meeting, not signing the record or attempting to sign it with a reservation of rights (ihtirazi kayıt). If there is a valid excuse, documented notice before the meeting and the outcome of the administration’s action should be followed up. [1] [4]

The 30-day application period should be preserved in post-assessment settlement

The request is made within 30 days of notification of the notice of assessment concerning the penalty within scope and is submitted to the relevant administration for forwarding to the competent commission. If an available official electronic channel is used for the application, a record showing that the submission was completed should be obtained. A draft form or an unsent petition is not a timely application. [1] [3]

The notice of assessment numbers, the type and amount of the penalty, the periods, the notification date and the reasoning should be clear. Insufficient understanding of statutory provisions, a mistake under Article 369, a tax error or clerical error, and divergence between court decisions and the administration’s opinion are among the reasons that may be raised within the statutory framework. Instead of merely saying “I want a reduction,” the specific dispute should be explained. [1]

The time limit, scope, form and the commission’s authority are examined. Setting a meeting date and rejecting the application without examination of the merits may lead to different consequences. One should not rely on an application to an unauthorized authority preserving the time limit in every case; reaching the correct unit and which penalties are being processed should be tracked. [1] [3] [11]

In electronic notification, the opening date differs from the legal notification date

Under VUK Article 107/A, electronic notification is deemed made at the end of the fifth day following the date on which the document is delivered to the addressee through the system. The time limit should not be calculated merely from the date the SMS arrived, the email was read or the document was opened. Delivery and notification records should be obtained. [6]

VUK General Communiqué No. 596, on the application of Article 107/A as amended by Law No. 7587, was published in Official Gazette No. 33397 of October 11, 2026, and the previous Communiqué No. 456 was repealed. The transition of existing users is regulated separately. An old online explanation should not be applied without checking its date. [7] [8]

Whether the first day and the last day coincide with a holiday is calculated under the relevant time-limit regime. The effects of the fiscal recess (mali tatil), the judicial recess and force majeure are not the same. An extension granted for one time limit should not be carried over to all application, payment and litigation time limits. [1] [5]

The competent commission is determined under Communiqué No. 592

The Communiqué dated March 28, 2026 regulates the commission’s authority over penalties in post-assessment settlement. Requests exceeding the authority of the tax office or affiliated tax office commission go to the relevant provincial tax directorate (defterdarlık) commission; those exceeding the latter’s authority go, in order, to the Tax Offices Coordination Settlement Commission (Vergi Daireleri Koordinasyon Uzlaşma Komisyonu) or the Central Settlement Commission (Merkezi Uzlaşma Komisyonu). [3]

Where there are multiple penalties, the notice of assessment containing the highest penalty amount of the relevant type is taken as the basis; under the rules on unity in settlement, the other requests are also discussed before this commission. When tax loss penalties and procedural irregularity or special procedural irregularity penalties exist together, the tax loss penalty amounts are taken into account in determining the commission. This rule does not open an out-of-scope penalty to settlement. [3]

The penalty’s own statutory calculation, the per-act 40,000 TL threshold for entry into settlement and the monetary authority of the commission that will examine the application are three separate matters. The commission authorities set by the Revenue Administration (GİB) by province or province group are not the same as the 40,000 TL threshold. [3]

Authority to represent and the intention to sign the record should be determined in advance

The taxpayer may act personally or, if a legal entity, through its legal representative; a duly authorized attorney-in-fact may also take part in the process. It should be checked whether the power of attorney has sufficient scope for settlement, signing the record and binding acceptance. A general advisory relationship or the task of keeping the company’s accounts does not by itself confer authority to sign the record. [1] [4]

The attorney’s legal assessment and the financial adviser’s (mali müşavir) review of calculations and documents can complement each other. Making use of a professional or a representative of a professional body at the meeting does not show that this person can declare intent in place of the taxpayer. Authority to attend, to make explanations and to sign should be distinguished. [4]

In companies, the form of representation, the continuation of authority, any joint-signature requirement and internal decision-making authority should be clarified before the meeting. A signature should not be given merely to conclude the meeting without knowing the acceptable financial burden and the ability to pay. An act with final effect should not be carried out with a “we will reconsider later” approach.

How does the settlement meeting conclude?

If there is agreement, the signature has binding effect as regards the penalty

The agreed penalty is entered in the record and duly signed. Before signing, the taxpayer, period, notice of assessment, type of penalty, initial amount and agreed amount should be checked. If there is a discrepancy between the oral explanation and the record, the record should not be signed until the outcome is written correctly. A copy should be obtained, and the payment due date and subsequent steps should be recorded. [1] [4]

The existence of multiple periods or penalties does not mean that every part not agreed upon automatically remains open. The scope of the application and the record should be clear. Accounts of settlement by splitting the tax base under the old rules cannot be carried over unchanged to the current system, in which the tax principal has been removed from scope. [1]

Failure to agree, failure to secure settlement and rejection without examination of the merits are different

“Settlement not being reached” (uzlaşmanın vaki olmaması) refers to the failure to agree on the amount at the end of the meeting. “Settlement not being secured” (temin edilememesi) relates to situations specified in the legislation, such as not attending the meeting, refusing to sign or wishing to sign with a reservation of rights. In “rejection without examination of the merits,” the meeting may not have taken place due to a time-limit, scope or procedural condition. The same litigation calendar cannot be assumed for these three outcomes. [1] [4] [10] [11]

Where the final offer is included in the record and the law allows later acceptance, written acceptance may be made within the set period. This is not a right to a second meeting or to renegotiate. As regards the final offer at the pre-assessment stage, the connection with the subsequent notice of assessment and the litigation time limit is tracked separately. A single general deadline for final acceptance should not be stated without seeing the record and the legislation. [1] [4]

If there is no settlement, how is the time limit for bringing an action calculated?

The fifteen-day period is not a new thirty days granted with every application

The general time limit for bringing an action against a notice of assessment before the Tax Court (vergi mahkemesi) is 30 days. If a timely and valid settlement request has been made for a penalty within scope and settlement has not been reached, Supplementary Article 7 applies. If the general litigation time limit has expired or less than 15 days remain, the time limit is extended to 15 days from notification of the record of failure. If a longer general time limit remains available, that time limit is taken into account. [1] [5]

If an action had been brought against the same tax penalty before the settlement request, under VUK Supplementary Article 7 the action is not to be examined until the settlement procedure concludes. If settlement is not reached, examination of the suspended action continues; if it is reached, the litigation route is closed with respect to the agreed penalty. This arrangement does not mean that an action concerning the tax principal, which is not subject to settlement under the current regime, will also be held in abeyance on the same ground. [1]

Calculations such as “the time limit resets upon application” or “a new 30 days starts after the meeting” cannot be made. Notification of the notice of assessment, the valid request, notification of the outcome record and the remaining general time limit are compared together. Under the current regime, this penalty calendar does not replace the time limit for an action concerning the tax principal. [1] [5]

These time limits should not be converted directly into a calendar without examining specific provisions, notification or holiday effects. The time limit for applications against a payment order and the time limit for an action against a notice of assessment are also different. [1] [5]

The unification-of-case-law decision also covers cases where settlement cannot be secured

The decision dated October 23, 1986, E.1986/2, K.1986/2 of the Assembly for the Unification of Case Law of the Council of State (Danıştay İçtihatları Birleştirme Kurulu) accepted that, for the purposes of Supplementary Article 7, the concept of settlement not being reached also covers cases where settlement cannot be secured. The right of action does not automatically lapse because a valid process ends without result in these ways. [10]

The provisions on the tax principal in force at the time of the decision have since changed. The preserved litigation option should be read together with the current scope and transitional provisions. A request made for a penalty that by law cannot be subject to settlement is not the same as a valid process in which settlement cannot be secured. [1] [10] [11]

The majority decision that an out-of-scope application does not preserve the time limit is important

In the decision dated January 25, 2008, E.2007/199, K.2008/7 of the Plenary Assembly of Tax Litigation Chambers of the Council of State, the majority held that the additional 15-day period cannot apply where a request concerning an out-of-scope penalty is rejected without examination of the merits, and reversed the court’s decision of persistence (ısrar kararı). The decisive statement reads: “first of all, there must be a settlement application made in accordance with procedure.” [11]

The dissenting opinion argued that the additional period should also be granted for requests rejected because of the statutory scope. This is not the majority reasoning or the operative part of the decision. The main litigation time limit should not be allowed to lapse in reliance on an application whose scope is disputed or that is clearly out of scope. [11]

The Constitutional Court found a violation in the failure to assess the record of a settlement meeting that actually took place

In the Constitutional Court (AYM) decision Akset Hırdavat Makine Kalıp Kesici Takımlar İş Güvenliği Sanayi ve Ticaret Ltd. Şti., Application No. 2021/62879, September 16, 2025, the Court examined the calculation of the time limit solely from notification of the notice of assessment, despite the submission of the record of a meeting that actually took place on January 13, 2021 and ended without result. It held that the failure to assess the record imposed a disproportionate burden, found a violation of the right of access to a court and ordered a retrial. [13]

The decision does not annul the tax or the penalty on the merits. The fact that the case involved a threefold penalty cannot be interpreted as meaning that all such penalties were opened to settlement. The rejection without examination of the merits in the earlier Council of State decision and the failure of the judicial authorities here to assess the record of a meeting that actually took place are different facts. In addition, the case concerns a process prior to 2024; under the new regime it is not a general basis that preserves the time limit for the tax principal. [1] [11] [13]

An agreed penalty cannot be made the subject of an action again

VUK Supplementary Article 6 and Supplementary Article 11 regulate the finality of matters agreed upon and established by the record. Re-establishing the same dispute through an action or complaint with respect to the agreed penalty is restricted by this rule. If an annulment action had previously been brought against the tax penalty, the effect of the settlement should be notified to the Tax Court. This explanation does not mean that criminal court proceedings concerning tax evasion will end through settlement. The route that remains open for the tax principal or for a separate act outside the record is determined separately. [1]

In the decision dated December 14, 2020, E.2016/16205, K.2020/5623 of the 4th Chamber of the Council of State (Danıştay 4. Dairesi), an action against the rejection of a correction-complaint (düzeltme-şikâyet) application, filed after pre-assessment settlement on the argument that real property sales should not have been taxed, was examined. Relying on the binding nature of the settlement, the Chamber upheld the rejection decision with modified reasoning. The decision shows the risk of the approach “I will settle first and then reopen the same legal debate through correction.” [14]

Finality does not by itself make lawful the collection of a debt that is not in the record, an incorrectly processed payment entry, or every separate issue concerning whether there was genuinely an intention to settle. However, re-arguing the merits of the agreed penalty through these issues is different. An obvious recording or calculation problem, a claim concerning authority and intent, or a separate collection act should be examined according to its own legal nature and within its own time limit.

A reservation of rights is also not a general tool that removes finality. The wish to sign the record with a reservation of rights at the meeting is linked to the cases where settlement cannot be secured. Protection of rights should rely not on adding a unilateral note afterwards, but on choosing the appropriate legal route in time. [1] [4] [10]

The VUK Article 376 reduction and settlement are not applied cumulatively to the same penalty

The statutory reduction is predictable; the settlement rate cannot be guaranteed

The general reduction under Article 376, where the conditions are met, is 50%. In 2026, for procedural irregularity and special procedural irregularity penalties not exceeding 40,000 TL, the increased application reaches 75%. A tax loss penalty does not fall into this group merely because of its amount; specific prohibitions are reserved. [1] [2]

Bringing an action against the tax principal and taking the penalty to settlement is not the same as bringing an action against the tax principal and requesting the Article 376 reduction for the related penalty. Article 376 contains a condition that the tax and penalty declared to be paid are not made the subject of an action; therefore, the choice to bring an action against the tax principal should be assessed separately with regard to the reduction. [1]

The reduction does not become unconditional merely through a petition. A timely application, payment of the relevant tax and of the penalty remaining after the reduction in accordance with the payment conditions, and the conditions concerning not bringing an action are assessed together. The Law provides for the possibility of payment within three months from the end of the due date if appropriate security is provided; this is not a general and automatic right to instalments. [1]

The settlement rate, on the other hand, is determined as a result of a valid meeting. The outcome obtained by another taxpayer or information heard about the commission is not a binding tariff. Along with the expected reduction percentage, the right concerning the tax principal, the total payment, objections concerning unlawfulness and proof, litigation costs and financing costs should be assessed together.

The former additional 25% payment reduction should not be carried over to new files

Current Supplementary Article 9 provides that no other reduction applies to agreed penalties. It cannot be said that a further 50%, 75% or the additional 25% reduction of the old system applies to the agreed amount. Files subject to the old provisions under Transitional Article 35 are examined separately. [1] [9]

The Law reserves the possibility, until the record is signed, of withdrawing from settlement and requesting application of the Article 376 provisions. The other application and payment conditions should still be examined. This option does not mean that, in every case, a new 30-day period for requesting the reduction arises after a failed settlement. [1] [9]

Payment and instalment consequences should be assessed separately

If the record is notified before the statutory payment period expires, the penalty is paid within the statutory period; if it is notified after the payment period has partly or wholly passed, it is paid within one month of notification of the record. The accrual slip (tahakkuk fişi) and the actual due date should be checked. One month and 30 days are not the same definition of a time period. The fact that no notice of assessment has yet been issued at the pre-assessment stage requires subsequent payment entries to be monitored. [1] [4]

Non-payment should not be described as a consequence that, as a rule, automatically invalidates the settlement and automatically restores the initial penalty amount. Collection based on the agreed amount and statutory ancillary charges depending on the type of penalty may come into play. By contrast, failure to comply with the payment condition of Article 376 affects eligibility for the reduction. Settlement and the statutory reduction subject to payment are not the same regime. [1] [9]

Settlement does not directly provide for instalments. If the conditions under Law No. 6183 are met, an application for deferral (tecil) may be considered separately; the Revenue Administration’s explanations state that agreed receivables may also be subject to deferral depending on the conditions. Acceptance is not automatic. The effect of the specific payment regime in the statutory reduction should not be equated with that of general deferral. [15]

The tax principal, late payment interest, the agreed penalty and other debts should be calculated separately. Payment of one item does not show that another is also closed. On the payment document, the match of tax type, period, accrual and taxpayer should be checked; in the event of incorrect offsetting or incomplete closure, a written application should be made.

A conscious choice should be made between litigation, correction, voluntary disclosure and settlement

Where the tax or penalty is unlawful, an action; in the case of a clear tax error defined by law, correction and, where necessary, a complaint; where the conditions for self-reporting at the appropriate stage are met, voluntary disclosure (pişmanlık); and, under the conditions of the statutory reduction, Article 376 are each assessed separately. Their timing, scope and effect on one another differ. Settlement is not a general procedural prerequisite that must be exhausted before litigation. [1] [5]

The effect of a tax action against an assessment on collection is determined by reference to the act and amount challenged. The generalization “a tax action was brought, so every debt and enforcement step stopped” is wrong. With regard to a payment order, a return filed with a reservation of rights or a separate collection act, the procedure and, where necessary, the conditions for a stay of execution are examined separately. [5]

While the outcome of the meeting is awaited, evidence should be preserved. The report and its annexes, electronic notification records, proof of delivery of books and documents, official correspondence and earlier explanations should be kept together. Viewing the file as consisting only of the face of the notice of assessment may weaken both the legal explanation at the meeting and any potential action.

The attorney’s role in preparing the application file

Notices of assessment, notification records, the report and annexes, examination records, relevant books and documents, earlier corrections, the settlement invitation, any petitions, and representation and payment documents should be gathered in the same file. For each penalty, the type, period, act, amount, notification, scope and date of the last step should be determined separately.

The attorney’s role is not only to attend the meeting. Separating the routes for the tax principal and the penalty, determining the applicable transitional provision, preventing a loss of time due to an out-of-scope application, assessing unlawfulness with its evidence and explaining the consequences of the record are also part of this work. The calculation review carried out with the financial adviser stands alongside, not in place of, the legal characterization.

Before the meeting, it should be known which rights are being waived, as well as what the acceptable financial outcome is. Afterwards, the record, notification, the period for accepting the final offer, the need for litigation and the payment due date should be checked again. The right choice depends not on the promise of the highest reduction, but on the legal strength of the file and the overall outcome.

Related articles: Settlement, Reduction or Litigation in Tax Penalties?; What Should Be Done When a Tax Notification Arrives?; Taxpayer Rights in Tax Examinations; Disguised Profit Distribution Through Transfer Pricing.

Conclusion

Settlement is an important administrative resolution route when its scope and consequences are properly understood. However, it does not mean that the penalty is erased entirely, that all debts are paid in instalments or that the dispute concerning the tax principal is automatically resolved. The 2024 amendment has made it necessary to establish separate legal plans for the tax principal and the penalty. [1]

The per-act application of the 40,000 TL threshold in 2026 to the relevant irregularity penalties, the specific exclusions, the 30-day application period and the conditional 15-day litigation option under Supplementary Article 7 should be assessed together. It should not be assumed that a further reduction will apply to the agreed penalty or that the same dispute can easily be reopened after signing. [1] [2] [9]

The real safeguard is not merely to agree on a lower amount; it is to decide knowing which debt becomes final, which right of action continues and which payment is to be made when.

Frequently Asked Questions

Does tax settlement erase the tax debt entirely?

No. Under the current general regime, the tax principal is outside settlement. If there is an agreed penalty amount, payment continues; settlement is not an automatic and complete amnesty. [1]

Can settlement still be made for the tax principal?

It cannot under the general system. Files in which Transitional Article 35 preserves the old provisions are examined based on the request and notification dates. The fact that the tax period is old is not sufficient on its own. [1]

What is the settlement threshold in lira in 2026?

For procedural irregularity and special procedural irregularity penalties, the per-act total must exceed 40,000 TL. This is not a lower limit for tax loss penalties or the ceiling of the commission’s authority. [1] [2] [3]

Does a special procedural irregularity penalty of exactly 40,000 TL fall within settlement?

It does not, on the basis of the amount alone. If there is no specific prohibition and the conditions of Article 376 are met, the increased 75% reduction may be considered. [1] [2]

Is there a 75% reduction for all low-amount penalties?

No. The increased rate is specific to procedural irregularity and special procedural irregularity penalties not exceeding the relevant threshold; it is not applied to a tax loss penalty merely because its amount is low. [1]

Can settlement be requested for a penalty linked to an act of tax evasion?

The related penalties and participation penalties imposed for acts under VUK Article 359 are subject to a statutory exclusion. A decision should not be made merely by looking at the multiple of the penalty without seeing the report and the legal basis. [1]

Until when can pre-assessment settlement be requested?

As a rule, from the start of the examination until the final record is drawn up. The 15-day request rule in the case of a special invitation is assessed separately. [4]

If pre-assessment settlement fails, can post-assessment settlement take place?

Not for the same penalty. Written withdrawal before the set settlement date is different; in this case the Regulation provides for treatment as if no request had been made. [1] [4]

Within how many days is a post-assessment application made?

Within 30 days from notification of the notice of assessment. In electronic notification, the relevant date is not merely the date the document was opened or the SMS date. [1] [6]

Does penalty settlement stop the time limit for an action against the tax principal?

This consequence should not be assumed under the current system. A litigation plan and time-limit tracking for the tax principal should be established separately. [1] [5]

Does a new 30-day litigation period start after the meeting?

No. If a valid request ends without result, the 15-day rule from notification of the record applies where the general time limit has expired or less than 15 days remain. [1]

Does an out-of-scope request provide an additional 15-day period?

This should not be relied upon. In the Plenary Assembly of Tax Litigation Chambers decision E.2007/199, K.2008/7, no additional period was accepted for a request rejected without examination of the merits because it was outside the statutory scope. [11]

Can an attorney or financial adviser attend the meeting?

Proper representation and attendance are possible. Making explanations and signing the record on behalf of the taxpayer are different powers; the power of attorney and company documents should be checked in advance. [1] [4]

Is there a fixed reduction rate in settlement?

No specific rate is guaranteed. The outcome of another file is not a binding tariff. The statutory rates of Article 376, on the other hand, depend on the conditions of a different option. [1] [9]

Can the record be signed with a reservation of rights?

In the legislation, this wish is linked to the cases where settlement cannot be secured. It should not be assumed that a unilateral reservation preserves the right of action against the agreed amount. [4] [10]

Is there an additional 25% or 50% reduction after settlement?

Not under the current general regime. Supplementary Article 9 does not provide for any other reduction. Old files covered by the transitional provision are examined separately. [1] [9]

Can one withdraw from settlement and request the Article 376 reduction?

The Law reserves this right until the record is signed. The other application and payment conditions are assessed separately; a new 30-day period does not arise in every case. [9]

When is the agreed penalty paid?

Within the statutory payment period; if the record is notified after this period has passed, within one month of notification. The actual accrual and due date entry should be checked. [1] [4]

Does settlement provide automatic instalments?

No. If the conditions are met, a separate deferral request under Law No. 6183 is assessed. Acceptance is not guaranteed. [15]

Can an agreed penalty be re-argued through correction and complaint?

Reopening the same underlying dispute is restricted by the finality rule. A separate collection or recording error is different from re-arguing the lawfulness of the agreed penalty. [1] [14]

Sources and legal bases

1. Tax Procedure Law No. 213 (213 sayılı Vergi Usul Kanunu); Article 376, Supplementary Articles 1, 6–9 and 11, Transitional Article 35 and the related specific provisions; together with the amendments made by Law No. 7524. Access the source
2. Revenue Administration (Gelir İdaresi Başkanlığı), 2026 Tax Penalties and Monetary Limits (2026 Vergi Cezaları ve Parasal Sınırlar); table of settlement and penalty reduction under VUK General Communiqué No. 588. Access the source
3. Tax Procedure Law General Communiqué No. 592 (592 Sıra No.lu Vergi Usul Kanunu Genel Tebliği); Official Gazette, March 28, 2026, No. 33207; in particular Articles 3–5. Access the source
4. Regulation on Pre-Assessment Settlement (Tarhiyat Öncesi Uzlaşma Yönetmeliği); Official Gazette, October 31, 2011, No. 28101; in particular Articles 8–19. Together with statutory amendments and annulment decisions. Access the source
5. Administrative Procedure Law No. 2577 (2577 sayılı İdari Yargılama Usulü Kanunu); in particular Articles 7–8, 27 and 37. Access the source
6. Tax Procedure Law Article 107/A, Notification by Electronic Means (Elektronik Ortamda Tebliğ); as amended by Law No. 7587. Access the source
7. Tax Procedure Law General Communiqué No. 596 (596 Sıra No.lu Vergi Usul Kanunu Genel Tebliği); Official Gazette, October 11, 2026, No. 33397; in particular Articles 1, 15–16 and Transitional Article 1. Access the source
8. Law No. 7587 Amending Certain Laws (7587 sayılı Bazı Kanunlarda Değişiklik Yapılmasına Dair Kanun); adopted on June 24, 2026, Article 9. Access the source
9. Tax Procedure Law Supplementary Article 9, Settlement and Reduction of Penalties (Uzlaşma ve Cezalarda İndirme); as amended by Law No. 7524. Access the source
10. Assembly for the Unification of Case Law of the Council of State, E.1986/2, K.1986/2, October 23, 1986. Access the source
11. Plenary Assembly of Tax Litigation Chambers of the Council of State, E.2007/199, K.2008/7, January 25, 2008; with the distinction between the majority and the dissenting opinion. Access the source
12. Plenary Assembly of Tax Litigation Chambers of the Council of State, E.2022/84, K.2022/1553, December 28, 2022. Access the source
13. Constitutional Court, Akset Hırdavat Makine Kalıp Kesici Takımlar İş Güvenliği Sanayi ve Ticaret Ltd. Şti., Application No. 2021/62879, September 16, 2025; §§ 20–28 and the operative part. Access the source
14. 4th Chamber of the Council of State, E.2016/16205, K.2020/5623, December 14, 2020. Access the source
15. Revenue Administration, explanations on deferral and payment in instalments under Article 48 of Law No. 6183; sections related to settlement and the payment reduction. Access the source

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