Türkiye introduces new tax audits for high-income businesses reporting low revenue

The Ministry of Finance is launching new tax audit regulations targeting businesses with low revenue despite high income. This new rule will come into effect on January 1, 2025.

What’s the plan?

The Revenue Administration will closely monitor businesses that report low revenue but have high income. The Ministry will conduct monthly audits to track daily and monthly revenues according to new tax audit regulations. The Ministry will ask businesses to provide explanations if there is a significant discrepancy between reported and detected revenue.

The new regulations will begin on January 1, 2025.

How will it work?

• Businesses will undergo monthly audits.
• Discrepancies between reported and detected revenue will be assessed.
• Businesses will be given 30 days to provide an explanation.
• If the explanation is deemed insufficient, businesses will face a 20% penalty and interest on past periods.

Examples

• A restaurant that reports annual gross sales of ₺5 million ($147.268) but monthly revenue of ₺1.2 million ($35.344) is detected. The business will be required to explain the discrepancy. Failure to provide a satisfactory explanation will result in penalties.
• A jeweler reporting annual revenue of ₺25 million ($736.340) but with detected annual revenue of ₺39 million ($1.1 million) will be asked to explain. Penalties will apply if the explanation is not adequate.
• If an aesthetic clinic reports an annual revenue of ₺30 million ($883.626) but revenue of ₺50 million ($1.4 million) is detected, they will also face penalties unless they provide a satisfactory explanation.

What did the minister say?

According to Finance Minister Mehmet Simsek, audits will be intensified for high-income but low-revenue reporting professions.

He emphasized that after audits, businesses failing to provide satisfactory explanations will face necessary disciplinary actions.