Ministry of Treasury and Finance uncovers $41M tax loss in luxury yacht sales
Treasury and Finance Minister Mehmet Simsek (C) arrives to attend G-20's third Finance Ministers and Central Bank Governors meeting in Gandhinagar, India, July 18, 2023. (AP Photo)
The Ministry of Treasury and Finance increased its audits on luxury yacht and boat sales as part of inspections targeting taxpayers who “earn a lot but pay little tax.”
The audits, covering the years 2021-2023, detected a tax loss of ₺1.4 billion ($41 million) from these sales.
The Revenue Administration is tightening the follow-up of taxpayers who earn high incomes and consume luxury, but do not pay taxes accordingly.
The fight against the informal economy consists of scrutinizing luxury expenditures in tourism regions and conducting detailed investigations into private yacht and boat sales.
The Revenue Administration, which cross-checked the data obtained from the Ministry of Transport and Infrastructure and international information exchange with its own records, detected a significant amount of tax loss, especially in sales between 2021-2023. During this period, the investigations revealed the sale of over 45,000 private yachts and boats.
TL 1.4B of unrecorded revenue
An analysis of insurance data and insurance values of yacht and boat sales revealed that there were large discrepancies between the sales prices declared by 15,000 real persons and 1527 companies and the actual sales prices. The Revenue Administration also examined these taxpayers’ money transfers and found unrecorded revenue of ₺1.4 billion ($41 million).
The Income Tax Law’s value-added gain provisions apply to gains arising from the disposal of vehicles like ships and yachts within 5 years, as per current legislation. In these sales made within the scope of commercial income, both income or corporate tax and VAT must be collected.
Minister Simsek’s evaluation
Treasury and Finance Minister Mehmet Simsek stated that the fight against the informal economy has been expanded sector by sector and said: “We continue to knock on the doors of those who earn a lot but pay little tax. Necessary taxes and penalties will be demanded from those who underestimate the sales prices.”
Simsek emphasized that the Revenue Administration will continue its sectoral field audits intensively and new audit methods will be put into use, and stated that those who make luxury expenditures with untaxed earnings will be closely monitored.
He added that the fight against the informal economy will continue unabated in order to ensure tax justice and prevent tax loss.
