Introduction
COVID-19 was first detected in December 2019. In a matter of months, COVID-19 spread to several countries, and the World Health Organization declared COVID-19 a pandemic on March 11, 2020.
Due to the COVID-19 pandemic, all hotel and flight reservations have been cancelled. Like the majority of other countries, Turkey adopted domestic and international travel and flight bans in order to contain the spread of COVID-19. The travel bans and reservation cancellations adversely affected enterprises and developers’ activities in the tourism sector since the tourism season begins in Turkey in March.
The government has taken certain precautions concerning the tourism sector to limit the effects of these adverse developments.
Postponement of withholding tax and value added tax payments for six months
The Ministry of Treasury and Finance announced the General Communiqué on the Tax Procedural Law Serial No. 518, published in the Official Gazette dated March 24, 2020 and no. 31078 (“Communiqué”). The Communiqué provides benefits to taxpayers active in accommodation services, including tour operatorship and travel agencies (“Tourism Establishments”), which are directly affected by the COVID-19 pandemic, and stipulates related governmental responses, as foreseen in the force majeure provisions of the Tax Procedural Law No. 213.
The Communiqué defers the tax liabilities of Tourism Establishments, which are considered entities that experienced a force majeure event:
- Filing March-April-May/2020 Withholding Tax Returns (incl. Withholding Tax and Premium Service Returns) and Value Added Tax Returns
- Regular deadlines: April 27, 2020, May 27, 2020 and June 26, 2020
- New deferred deadline: by the close of business on July 27
- Deadlines to pay the taxes accrued under these returns: by the close of business on October 27, 2020, November 27, 2020 and December 28, 2020
- Filing March-April-May/2020 Ba-Bs Forms
- Regular deadlines: by April 30, 2020, June 1, 2020 and June 30, 2020
- New deferred deadline: by the close of business on July 27, 2020
- Issuance and signing of March-April-May/2020 e-Books; loading required March-April-May/2020 “Electronic Book Certificates” onto Revenue Administration’s processing system
- Regular deadlines: by April 30, 2020, June 1, 2020 and June 30, 2020
- New deferred deadline: by the close of business on July 27, 2020
Postponement of accommodation tax’ application
The Law No. 7226 on Amendments to Certain Laws (“Law”) was published on the Official Gazette no. 31080 on March 26, 2020.
The amendments foreseen under Article 51 of the Law postpone the application of accommodation tax to January 1, 2021; the postponement enters into force on April 1, 2020.
Postponement of payments arising from allocation of public areas for construction of tourism facilities
Within the scope of the Law, the payments of rent, definite permits, definite allocations, rights of easement, usage rights, utilization permits, additional utilization fees and revenue share between April 1, 2020 and June 30, 2020 were postponed for six months without the operators and investors being required to file applications who were allocated public lands to build tourism facilities by the relevant ministries and have the relevant licenses (such as a Tourism License) from the Ministry of Culture and Tourism. These receivables will be collected after June 30, 2020 without incurring any interest rate increase until the end of the postponement period.
The Law also postponed for six months the payment period of the occupancy fee (tr. ecrimisil) for operators and investors licensed by the Ministry of Culture and Tourism who are operating their facilities on public land without permission, without the need to apply for postponement for the period between April 1, 2020 and June 30, 2020.
Conclusion
Tourism Establishments that fall within the scope of the Communiqué and the Law should pay close attention to the deadlines for the deferred tax, rent, definite permit, definite allocation, rights of easement, usage right, utilization permit, and additional utilization fees and the revenue share liabilities.
