Turkish finance ministry targets unregistered revenue in car rental sector

The Ministry of Treasury and Finance has announced an expansion of its inspections in the car rental sector, focusing initially on companies renting luxury vehicles.

The crackdown has uncovered approximately ₺1.7 billion ($49.5 million) in unregistered revenue and resulted in ₺500 million ($14.5 million) in fines, according to a recent statement.

Details of the inspection process

The Revenue Administration (GIB) has been carrying out comprehensive audits as part of its ongoing efforts to combat the informal economy. The initiative encompasses various sectors and professions to ensure economic transparency.

In response to the rapid growth of the car rental industry, which has seen an increase in both company numbers and revenue, the finance ministry began targeted inspections. The All Car Rental Organizations Association reported that the operational car rental sector added 34,000 new vehicles with investments totaling ₺43.4 billion ($1.26 billion) in the first half of this year.

Findings and penalties

The ministry’s audits involved cross-referencing income declarations and financial records of car rental firms with data from the General Directorate of Security. The findings revealed significant discrepancies:

• Inspections covered: 5,600 rental companies
• Unreported revenue: ₺1.7 billion identified
• Fines imposed: ₺500 million
• Additional assessments:
  • Income tax base discrepancy: ₺637 million
  • Corporate tax base discrepancy: ₺195 million
  • VAT discrepancy: ₺904 million

Approximately 4,000 inspection reports have been filed following these audits.

Minister’s remarks on ongoing efforts

Treasury and Finance Minister Mehmet Simsek emphasized the importance of these inspections in maintaining economic fairness and preventing tax evasion. “Our intensified audits aim to mitigate unfair competition and recover lost tax revenue,” said Simsek.

He highlighted that similar audits will continue, particularly targeting luxury car rental firms. “The fight against the informal economy will persist under the principles of fairness and efficiency in taxation,” he added.

We are increasing our inspections of all areas of activity in the high-income group and luxury segment in the fight against informal economy.

Treasury and Finance Minister Mehmet Simsek

Simsek stated that audits will increase to eliminate unfair competition and tax loss caused by informality and said, “Audits, especially in the service sector, will also support transparency and competition,” he said, adding, “Such audits will continue, starting with businesses operating in the luxury segment. Within the framework of the principle of fairness and efficiency in taxation, our audits to combat the informal economy will continue unabated.”