Issues in Export Registered Sales

Issues in Export Registered Sales

In this article, we will share with you a question asked and the answer we have given.

The question is as follows: "We, as a manufacturer company, have sold without VAT according to Article 11/1-c of VAT Law No. 3065, registered export to a company operating and exporting in Turkey. Because the firm has declared that it will export the goods it has received from us. However, after receiving the product, we learned that it did not export within its time and even sold it to another company in the country. In this case, what could be the problems to come. How should we follow a path not to fall into such a situation?"

Before I gave the answer, I collected the question a little bit and rearranged it.

First of all, it should be known that "VAT RESPONSIBILITY in export registered sales is the manufacturer company". The tax office recognizes and addresses the manufacturer if the VAT exception cannot be used because the conditions are not met in the export registered sale.

After the export registered sale, the manufacturer shall declare the export registered sale in the VAT declaration of the month in which the export registered sale takes place, and shall have the VAT issued for which it is not collected in this way. Then, when the export takes place, he takes a photocopy of the Customs Declaration from the exporting company and gives it to the Tax Office, which shows that the export has taken place. The Tax Office, on the other hand, sees that exports have taken place from the VEDOP system and the VAT payment is eliminated. Thus, the manufacturer is free from the obligation to pay the VAT that it does not collect.

The period for the issuance of the export after the tecil (abortion) process mentioned above is 5 years.

Be careful,

The time to make an export is until the end of the third month following the month in which the export registered sales invoice was issued.

The period of abandonment of the VAT amount by declaring the export is 5 (five) years from the date of the export registered sale.

If you ask, "Why five years?", there is no judgment anywhere on that period. In such a case, the provisions of the "General Timeout" in the Tax Procedure Act apply, which is 5 years.

Here is an example of how this 5-year period can become a problem. Suppose an intermediary exporter purchases goods under the export-registered scheme but does not export them. When the manufacturer asks for the export declaration, the intermediary claims that the goods have been exported, but repeatedly refuses to supply a photocopy, offering excuses: “My customs broker is moving; we are moving; the document was lost and I am obtaining a copy from Customs; the employee handling it has left and I cannot find it, but will soon; I have separated from my partner and the declaration is with them, but it will arrive soon.” The customs declaration therefore remains unavailable. Eventually, the manufacturer stops following up and forgets. This can happen. Much later, shortly before the 5 years expire (for example, 1 month beforehand), a tax office notice arrives: “The export-registered sale made on date X has not been discharged.” Without the customs declaration, the discharge cannot be completed.

This part is very important: the export registered sale must be made and the VAT amount in question must be paid back to the tax office, together with a 5-year delay penalty, from the date of the first VAT declaration.

We have the right to demand this payment from the brokerage firm, which misleads the manufacturer. If we can't collect, we have the right to sue. There are examples of cases that have been sued in this way before and that have been collected by a court order.

To avoid this situation, my suggestion is that the manufacturer receives a pledge from the exporter firm that the export registered sales conditions will be met. If a copy of the Customs Declaration on export does not come at the end of a reasonable period of time, it must be issued a notice from the notary and informed the Tax Office at the end of the period that the VAT will be paid in penalty and then the commitment will be processed and the fee paid will be collected. Nevertheless, if the Customs Declaration does not come, the warning stated in the notice must be put into practice.

I hope you don't face such a negative situation. In our next article, I will share the example of the pledge for the export registered sale mentioned above.

Hüseyin TEKGÜÇ
www.inovakademi.com

(*) I think the reasonable time may be the fourth or fifth month from the month of the export registered sale. If we believe he is sincere in his excuses for not giving the customs declaration to the exporter firm, we can extend that time.

Important Note:

1. This article provides general information about the "KV Return". We advise readers to research and check the comments and information in depth, to consult the consultant, in case legislation can be renewed in the coming days.
2. It is understood that some of the details in practice are not the same in all Tax Offices.