Cancellation of Taxpayer Registration
In order to prevent the risk arising from the continuation of forged document issuance activities until the completion of the inspection of taxpayers who are referred to tax inspection, and to prevent tax loss due to such actions during this process, the tax administration has been granted the authority to take precautionary actions and cancel the taxpayer registration of those taxpayers who are deemed to have a high risk of issuing forged documents, without waiting for a report to be issued regarding them.
In the first paragraph of Article 160/A titled "Cancellation of Taxpayer Registration Based on Analysis and Evaluation Results," added to the Tax Procedure Law No. 213 by Article 24 of Law No. 7194, it is stipulated that: Based on factors such as the duration of taxpayer registration, size of active and equity capital, amount of tax paid, number of employees, and whether tax obligations have been fulfilled, the Ministry of Treasury and Finance may conduct analysis and evaluations on taxpayers' tax compliance levels. If it is determined through these studies that there is a high risk of forged document issuance, the taxpayer will be referred to tax inspection and an on-site inspection will be carried out. Following the on-site inspection, and in accordance with the principles determined by the Ministry of Treasury and Finance, the taxpayer registration may be cancelled with the opinion of the tax office that the taxpayer poses a high risk of forged document issuance and with the approval of the head of the tax office or the provincial treasurer. This decision will be notified to the taxpayer, and within one month from the date of notification, the taxpayer registration will be re-established as of the date of cancellation, provided that a guarantee of the type specified in the same article, in an amount not less than the minimum guarantee amount specified in the first paragraph of Article 153/A and equal to 10% of the total amount stated in the documents issued during the high-risk periods, is provided, and all tax debts are paid. Tax returns and declarations not submitted during the period between cancellation and re-establishment of the registration must be submitted within one month from the date of notification of the letter regarding re-establishment, and the accrued taxes must be paid within the same period.
If it is determined through the inspection that the taxpayer had no other commercial, agricultural, or professional activity and established the taxpayer registration solely for the purpose of issuing forged documents, the guarantee obtained will be offset against tax debts including those arising from the inspection, and any excess amount will be refunded. If it is determined that the taxpayer had other commercial, agricultural, or professional activities but still issued forged documents, actions will be taken in accordance with the fourth paragraph of Article 153/A. However, any previously obtained guarantee will not be refunded until the assessments and penalties imposed due to forged document issuance are finalized. If it is determined that the taxpayer did not issue forged documents as a result of the inspection, and there are no other outstanding tax debts, the guarantee will be refunded.
With the above-mentioned article of the Tax Procedure Law No. 213, the Ministry of Treasury and Finance, taking into account factors such as duration of taxpayer registration, size of active and equity capital, amount of tax paid, number of employees, and whether tax obligations have been fulfilled, is authorized to conduct analysis and evaluations to determine whether a taxpayer is a forged document issuer. As a result of these evaluations, if it is concluded that there is a high risk of forged document issuance, and the taxpayer is therefore referred to tax inspection, in order to prevent the risks arising from the continuation of such activities and to avoid tax loss during this period, the tax administration is granted the authority to take precautionary measures and cancel the taxpayer registration of those who are considered high-risk, without waiting for a report to be issued. It is not required to have concrete evidence sufficient to form a definitive opinion in tax terms that the taxpayer is issuing forged documents for the cancellation of registration to be enacted. (In fact, such concrete evidence sufficient to form a definitive tax opinion would be completed with the report to be issued regarding the taxpayer, and the tax administration has also been granted the authority to cancel the taxpayer registration ex officio based on the report of forged document issuance in Article 160.) On the contrary, the presence of strong indicators raising serious doubts about forged document issuance as a result of the analysis and evaluations conducted about the taxpayer is deemed sufficient for action to be taken under this article. Furthermore, in the continuation of the article, it is also regulated that in case no negative report is issued following the inspection (i.e., the findings are not sufficient to prove that the taxpayer issued forged documents), the consequences of the precautionary measure taken against the taxpayer shall be eliminated.
Conclusion:
For the enactment of the cancellation process, it is not required to have concrete evidence sufficient to form a definitive opinion in tax terms that the taxpayer is issuing forged documents.