If the invoice is not issued within 7 days, a special irregularity penalty cannot be imposed by deeming the invoice as not issued.
COUNCIL OF STATE BOARD OF TAX APPEALS 2021/1236 E. , 2022/1726 K.
‘Case Law Text’
T.C.
D A N I S T A Y
BOARD OF TAX APPEALS
Principal No: 2021/1236
Decision No: 2022/1726
APPEALING (DEFENDANT) : …DEFENDANT Department
(… Tax Office Directorate)
ATTORNEY : Av. …
AGAINST PARTY (plaintiff) : … Industry and Trade Limited Company
SUBJECT OF THE REQUEST : It is requested that the insistence decision of the …. Tax Court dated … and numbered E:…, K:… be reversed on appeal.
JUDICIAL PROCESS :
The request subject to the lawsuit: On behalf of the plaintiff, a lawsuit was filed for the abolition of the special irregularity penalty imposed in accordance with paragraph (1) of Article 353 of Article 353 of the Tax Procedure Law No. 213 for the March period of 2014, on the grounds that he did not issue an invoice within seven days for the performance of some services based on the report issued as a result of the audit conducted at the workplace.
… Tax Court’s decision dated … and numbered E:…, K:…:
In the report dated 16/09/2015 issued as a result of the audit carried out at the workplace of the plaintiff company, the following determinations were made:
i. The taxpayer provided services to the … Party Antalya Provincial Presidency during and after the elections held in March 2014.
ii. The aforementioned service fee is 431.032,60 TL including value added tax, including 369.547,52 TL and 61.485,08 TL.
iii. Although the service provided for 369.547,52 TL was completed in March 2014, the invoice issued for this service is dated 11/07/2014 and the invoice amount is 431.032,60 TL.
Although the report issued in the presence of the official of the plaintiff company is of a nature that gives rise to a judgement about the plaintiff, it is necessary to examine whether the determination made is sufficient to impose a special irregularity penalty.
In paragraph (5) of Article 231 of the Tax Procedure Law No. 213, it is stated that the invoice will be issued within a maximum of seven days from the date of delivery of the goods and it is ruled that the invoices not issued within this period will be deemed to have never been issued.
In the aforementioned article, it is mentioned that the invoice must be issued within seven days, and in Article 353 of the Law No. 213, which regulates the cases in which a special irregularity penalty may be imposed, it is stated that in order to impose a special irregularity penalty, it must be clearly determined that the invoice is not received and not given.
Considering the principle of investigating the real nature of the invoice, which is one of the general principles of tax law, although the invoice was issued after the seven-day period, the act of ‘not issuing’, which requires the imposition of a special irregularity penalty, has not been established in the event, and the invoice has been issued late.
Accordingly, considering the invoices issued by the plaintiff, the penalty imposed is not in compliance with the law.
The court cancelled the special irregularity penalty on this ground.
The decision of the Third Chamber of the Council of State, which examined the defendant’s appeal request, dated 18/04/2019 and numbered E:2016/14960, K:2019/2711:
No. 213 It is clear that compliance with the maximum issuance period specified in the Law No. 213 is mandatory for the document to be accepted as an invoice.
In other words, it is not possible to accept the invoice issued after the period specified in the Law as a valid invoice.
There is no doubt that the invoice that is not issued within the period stipulated in the Law will not be valid and will constitute an act of not issuing an invoice for the issuer and not receiving an invoice for the recipient.
In this case, since it is clear that the plaintiff has issued an invoice after the seven-day period from the date of performance of the service, there is no contradiction to the law in the special irregularity penalty in dispute.
The Chamber reversed the decision on this ground and rejected the plaintiff’s request for correction of the decision.
… Tax Court’s insistence decision dated … and numbered E:… K:…:
The Court insisted on the legal reasons and justification in its first decision.
APPELLANT’S CLAIMS: It is claimed that the insistence decision should be reversed by stating that there is no violation of law in the special irregularity penalty subject to dispute.
DEFENCE OF THE OPPOSITE PARTY: No reply has been submitted.
OPINION OF THE DANIŞTAY EXAMINING JUDGE …: Since the claims put forward in the petition of appeal are not relevant and do not have the qualification to overturn the decision in the face of the legal reasons and justification on which the insistence decision is based, it is considered that the request should be rejected.
ON BEHALF OF THE TURKISH NATION
The Board of Tax Appeals of the Council of State, after listening to the explanations of the Examining Judge and examining the documents in the file, discussed the necessity:
LEGAL ASSESSMENT :
The allegations put forward in the petition for appeal are not deemed to be in a situation that requires the decision to be reversed.
CONCLUSION :
For the reasons explained;
The defendant’s appeal request is rejected,
Pursuant to paragraph 1 of Article 54 of Law No. 2577 (which continues to be applied pursuant to Provisional Article 8), it was decided by majority of votes on 28/12/2022, with the remedy of rectification open within fifteen days from the day following the date of notification of this decision.
X – VOTE AGAINST:
We disagree with the decision with the opinion that the request for appeal should be accepted and the insistence decision should be reversed in accordance with the legal reasons and justification in the decision of the Third Chamber of the Council of State.