Disaster & Tax Law Guide

Tax Law

Natural disasters such as earthquakes are recognised as force majeure under Turkish tax law. This guide covers extension of deadlines, cancellation of tax debts and penalties, valuation of damaged assets, certificates of loss and tax deduction of donations.

Force Majeure and Extension of Deadlines

Natural disasters such as earthquakes are recognised as force majeure under Turkish tax law. After a disaster, the Ministry of Treasury and Finance usually issues special regulations for the affected area; following these announcements is recommended.

Deferral of Filing and Payment

During the force majeure period declared by the Ministry of Treasury and Finance, the deadlines for filing tax returns and paying accrued taxes are extended.

Restructured Debts

Instalment payments under existing debt-restructuring laws can also be expected to be deferred during this period.

Cancellation of Taxes and Penalties

If certain conditions are met, unpaid tax debts and penalties may be cancelled in whole or in part.

Loss of Assets

Taxpayers who have lost at least one third of their assets may have their income and corporate tax debts and penalties cancelled in proportion to the degree of loss.

Loss of Crops

Farmers who have lost at least one third of their agricultural produce have that year's land tax debts and penalties cancelled.

Application Requirement

A written application to the Ministry of Treasury and Finance is required, and the degree of loss must be determined by local administrative committees.

Valuation of Damaged Assets

Special rules apply to determining the value of raw materials, semi-finished and commercial goods whose value has decreased or been destroyed because of the earthquake.

Precedent Value Assessment

The cost of goods whose value has fallen because of the earthquake is calculated over a "precedent value" to be determined by the Appraisal Commission.

Extraordinary Depreciation

For assets damaged in the earthquake — vehicles, buildings, machinery or furniture — you may apply to the tax office to have an "extraordinary depreciation rate" set. The amount calculated at this rate can be deducted from the tax base as an expense.

Loss of Commercial Books (Certificate of Loss)

Taxpayers whose workplace was destroyed or whose archives were damaged should take the following steps to avoid future penalties.

Application to the Court

Those whose commercial books and records were lost must apply to the Commercial Court — within the deadlines extended by post-disaster special regulations — to obtain a "Certificate of Loss".

If no special regulation exists, the application deadline is 30 days from the date you learned that the documents were lost or damaged.

The application can be made by the taxpayer in person or by an authorised representative; if the taxpayer is deceased, by any heir with a certificate of inheritance or their authorised representative.

Tax Deduction of Donations and Aid

To encourage aid to disaster survivors, these expenditures can be deducted from the tax base.

Direct Expense Recording

Donations made against receipt to official aid committees can be recorded directly as expenses for income tax purposes.

Deduction from Income

Cash donations and aid made to the Turkish Red Crescent, municipalities, public administrations, or for the construction of schools and health facilities are deducted from the income declared in the annual return.