Statement from TÜRMOB President Kartaloğlu regarding inflation adjustment.

Emre Kartaloğlu, President of the Union of Turkish Certified Public Accountants and Sworn Public Accountants (TÜRMOB), stated, “The efforts of our professional community, which strives to submit tax declarations on time, are being disregarded. All correction processes are expected to be reversed, and the declarations are to be amended.”

TÜRMOB President Emre Kartaloğlu made a press statement regarding the “General Communiqué on Inflation Adjustment” published in the Official Gazette. Speaking in front of the Ministry of Treasury and Finance, Kartaloğlu said, “Unfortunately, the General Communiqué No. 563 published in the Official Gazette on August 31 contains provisions that will seriously harm our accounting and tax system. An appointment was requested from the Minister of Treasury and Finance, Mehmet Şimşek, to explain the mistakes made by this Communiqué and to present our solutions, but we were not granted an appointment. For this reason, the necessity of making this press statement has arisen. We are here today as representatives of our accounting profession, along with our Union Managers and Chamber Presidents, actually as 130,000 professionals.”

Kartaloğlu expressed that certified public accountants and sworn public accountants have made all kinds of sacrifices for the public good during Turkey’s difficult days and will continue to do so in the future, saying, “Our Union, which represents the professionals at the center of tax practices in the field, is facing a serious problem due to the failure to take timely into account the proposals and statements made due to our public responsibility. Those who think that a problem arising from this situation will be solved with a more problematic regulation are in a great illusion, which time will reveal, and the Ministry itself will suffer the most from this. Today, the burden on us has become unbearable. The disproportionate workload and unfair fee schedule have gone beyond negatively affecting the work-life balance of Certified Public Accountants and have begun to take away our colleagues’ basic right to live. Our professional community is constantly shaken by reports of chronic illnesses, sudden deaths, and unfortunately, suicides.”

Recalling that TÜRMOB held a large rally in Ankara on August 1, Kartaloğlu said, “The issues we will address here concern not only our professional community but also our country. As it is known by the public, since the first day the conditions for inflation adjustment were formed, the difficulties that this practice would cause have been stated at every platform and to all parties involved. It has repeatedly been stated that inflation adjustment should not be applied during temporary tax periods, that the balance sheet preparation process can be carried out according to the provisions of the Tax Procedure Law and the Turkish Commercial Code at the end of the year, and that the current problematic state of the application would lead to unfair results in taxation. Not satisfied with this, thousands of devoted colleagues from all over our country participated in a large rally in Ankara on August 1. At this rally, the problematic aspects of inflation adjustment and the necessity of not applying inflation adjustment during temporary tax periods were loudly expressed, starting with the problems of our profession.”

Kartaloğlu stated that despite all warnings from their Union, the Ministry of Treasury and Finance insisted on publishing the communiqué, saying, “With the Tax Procedure Law Circular, it was stated that the deadline for submitting the 2024 II. Temporary Tax Declaration has been extended to August 27, indicating that this is the last time. In response to this announcement, our professional community has ensured that more than 1 million declarations are submitted on time with a sense of professional responsibility, working day and night. During this process, with Circular No. 172 of the Tax Procedure Law, the declaration submission deadline has been extended once again until September 6, 2024. With this second extension, the Ministry of Treasury and Finance has created an expectation in the public that inflation adjustment will not be postponed. However, on August 29, 2024, it was stated on the website of the Revenue Administration and in the statements of the Minister of Treasury and Finance that the General Communiqué No. 563 of the Tax Procedure Law was sent to the Presidency for publication, and despite all our efforts, the Communiqué was published in the Official Gazette.”

Kartaloğlu pointed out that with the communiqué published in the Official Gazette, it was stated that those with total gross sales on the income statement dated December 31, 2023, below 50 million TL would not be required to make an inflation adjustment, saying, “As of the publication date of the Communiqué, it has been requested that taxpayers who submitted their 2024/2 period temporary tax declarations by working day and night, relying on the current legal regulations, make the necessary corrections in the declaration without the obligation to make a correction in their ledger records and correct the profits or losses arising from the inflation adjustment. Additionally, with the Tax Procedure Law Circular No. 173 dated August 8, 2024, the deadline for submitting the 2024 second temporary tax declarations has been extended for the third time to September 13, 2024.”

“The efforts of our professional community that strives to submit tax declarations on time are being disregarded”

Kartaloğlu emphasized that the efforts of the professional community are being disregarded with the communiqué, stating, “The efforts of our professional community, which has worked day and night with great sacrifices to submit the temporarily extended Temporary Tax Declarations on time due to the aforementioned Communiqué, are being disregarded, and it is requested that all correction processes be reversed and the declarations be amended. It has also been stated in General Communiqué No. 563 that tax penalties will be imposed on taxpayers who do not make corrections on time. With this Communiqué, an inflation adjustment is practically also being sought.”

Kartaloğlu mentioned that during Mehmet Şimşek’s previous term as Minister, the 2nd paragraph of Article 369 of the Tax Procedure Law established that regulations made by General Communiqué or Circular could not be applied retroactively. He stated, “However, despite all our warnings and alerts, imposing a correction obligation on the submitted temporary tax declarations without considering this clear provision of the Tax Procedure Law is an illegality in itself. It is stated in the Tax Procedure Law that the correction process in tax declarations will occur in the presence of tax errors. Asking the professionals who have complied with the existing legal and administrative regulations with great sacrifices during the declaration submission process to correct the declarations they have submitted is not only illegal but also causes taxpayers and our colleagues to face an unnecessary and meaningless workload. The same situation also confronts taxpayers whose tax will increase with the correction declaration and the professionals.”

Emphasizing that the correction obligation brought by Article 4 of the Communiqué cannot be accepted in any way, Kartaloğlu stated, “Making regulations that will change the tax base with the Communiqué, making deductions and exceptions other than those listed in the Law, retroactive regulations that take away the acquired rights of taxpayers, violating the principle of legal security, severing the connection between ledger records and the declaration, and threatening with penalties while disregarding the principle of legality in crimes and penalties are all completely illegal. Our Union has filed a lawsuit with the Council of State on September 2, registered under case number 2024/4720, demanding the annulment of Article 4 of the Communiqué, and the reasons for illegality have been detailed in this case. We are fully convinced that the Supreme Council of State will evaluate the issue as a matter of urgency. Our Union believes that Article 4 of the Communiqué is illegal and that no taxpayer can be forced to correct their declarations, but any taxpayer who wishes can correct their declarations under this Communiqué.”

Kartaloğlu underlined that the Ministry of Treasury and Finance should not turn a deaf ear to the problems and solutions presented to it, stating, “To eliminate the situation that arises with the Communiqué and will cause significant difficulties not only for our colleagues but also for businesses in the future, the Ministry should be open to our Union’s views and proposals on how regulations should be made for the 3rd temporary tax and annual taxes. Solutions proposed to alleviate the workload of Certified Public Accountants have been communicated to the officials of the Ministry of Treasury and Finance both in writing and orally multiple times. Our profession and our colleagues are awaiting solutions to dozens of problems. The situation has reached a breaking point. It is unnecessary to list these problems again, as they are known to our Ministry. However, it is necessary to emphasize once again that it is not possible to sustain the current workload with the existing fee schedule due to the fact that this situation threatens the sustainability of accounting services and offices. Our Ministry must not ignore the problems and solutions presented to it any longer, and it needs to focus on solving the issues faced by Certified Public Accountants and Sworn Public Accountants, who are an early risk warning mechanism in commercial and economic life.