Inflation Accounting Requirement in Turkey

The last period for which revaluation can be applied is the balance sheet of 30.09.2023. In this context, you can find below the summary which was prepared as a reminder for you. The Tax Procedure Law No. 7338 and the Law on Amendments to Certain Laws published in the Official Gazette No. 31640 dated October 26, 2021;

• With the article 31 and the paragraph (Ç) added to the duplicative article 298 of the Tax Procedure Law No. 213, taxpayers within the scope of the subject to revaluation of their depreciated economic assets in periods when the conditions for inflation adjustment are not met(regulation regarding the continuous revaluation application).
  
  
• Before benefiting from the continuous revaluation application within the scope of Article 52, and with the temporary Article 32 added to the Tax Procedure Law No. 213, and within the scope of paragraph (Ç) added to the duplicate Article 298 of the Tax Procedure Law, the immovable properties registered in the balance sheets of the taxpayers within the scope and other economic assets are subject to depreciation as of the end of the previous accounting period (regulation regarding the valuation of one-time fixed assets’ asset entry values until the period when continuous valuation will begin).

In short, the taxable and one-time revaluation institution carried out within the scope of Provisional Article 32 is an opportunity that can be applied to the assets that are included in the balance sheet of the accounting period before the accounting period in which the evaluation will be made and are still registered as assets as of the date of the evaluation, before the application of Repeated 298/Ç. The tax-free and continuous revaluation facility included in the duplicate article 298/C is an opportunity that can be applied separately for each year, starting from 2022, in periods when the conditions for inflation correction are not met.

Provisional Article 32 regulates the one-time revaluation applied according to the coefficients to be determined from PPI rates and includes a 2% tax payment depending on the increase in net book value. Duplicate article 298(d) regulates the revaluation based on the “revaluation rate” published at the end of the quarter and no tax is paid.

On the other hand, unless there is a new update, inflation accounting will start to be applied as of 31.12.2023. Since there is no longer 4th provisional tax period, the last period to benefit from revaluation practices will be 30.09.2023, and in this context, the said revaluation application can be used until the 3rd provisional tax declaration date. Therefore, before inflation accounting, it is possible to re-evaluate the depreciable economic assets of institutions in accordance with the Provisional Article 32 of the Tax Procedure Law and the Repeated Article 298(ç).