WHAT IS THE STATUTE OF LIMITATIONS IN TAXATION, HOW IS IT CALCULATED?
Statute of limitations is the cancellation of a tax receivable due to the lapse of time. The statute of limitations applies regardless of whether the taxpayer has made an application in this regard. In this sense, statute of limitations is an institution that eliminates public receivables upon the expiration of the periods specified in its own law. The statute of limitations in tax law is the statute of limitations for assessment, the statute of limitations for imposing penalties and the statute of limitations for correction in the Tax Procedure Law and the statute of limitations for collection in the Law No. 6183 on the Procedure for Collection of Public Receivables.
The statute of limitations on assessment (accrual statute of limitations) is the inability of the administration to accrue the public debt in question after the period specified in the law has elapsed from the event that gave rise to the tax.
The statute of limitations for collection is regulated in Article 102 of the Law No. 6183 on the Procedure for Collection of Public Receivables. Pursuant to Article 102, ‘If a public receivable is not collected within 5 years from the beginning of the calendar year following the calendar year in which it is due, it becomes time-barred.’
While the accrual statute of limitations generally starts from the beginning of the year following the year in which the tax-generating event occurred, the collection statute of limitations starts from the beginning of the year following the due date of the unpaid tax. For example, for a gain obtained in 2020, the year in which the taxable event occurred is 2020. However, the income for 2020 (according to income tax) is paid in two instalments in 2021. In other words, if it is declared fully and completely within the legal period, the due date is in 2021. If the taxpayer has earned income in 2020, if the taxpayer declares this income in 2021 (in March) and does not pay it, it becomes statute of limitations for collection at the end of the 5th year from the beginning of the year following 2021, ie 2022, ie 31.12.2026.