Ankara --:-- · —
bilgi@utuhukuk.com
0536 593 16 00
UTU Hukuk ve Danışmanlık17 min readUpdate:
Recidivism in tax misdemeanoursrefers to the increased application of a penalty where a person whose penalty for tax loss or irregularity has become final is penalised again within certain periods. The legislature did not provide for custodial sanctions for these unlawful acts; instead it provided for pecuniary sanctions in order to prevent losses in treasury revenue. In this article we discuss tax misdemeanours, the recidivism provision in Art. 339 of the Tax Procedure Law (VUK) and the amendment made by Law No. 4369, the conditions and consequences of recidivism, and special situations.
Currency note
This article was prepared in accordance with the legislation and practice in force on the date of publication. The amounts in the examples in the article, in particular the amounts of irregularity penalties, and the case law on the subject may have changed since that date. You are advised to consult a lawyer on the current position.
Vergisel kabahatler, are unlawful acts committed by taxpayers and persons liable for tax through acts contrary to their tax obligations, which cause the state a loss of tax or create a risk of tax loss, and whose penalty is an administrative fine imposed by the administration.
The tax misdemeanours regulated in the VUK consist of the misdemeanour of tax loss and the misdemeanours of irregularity (general irregularity and special irregularity). The penalties for tax misdemeanours are the administrative fines regulated in the VUK and imposed by the tax administration.[1]
Viewed in this light, there is a difference between tax misdemeanours and tax offences in terms of sanctions. For tax offences, the sanction prescribed by the legislature is imprisonment, whereas for tax misdemeanours it is administrative fines imposed by the tax administration.
Tax offences
The sanction provided for by the legislature is a custodial sentence.
Vergi kabahatleri
The sanction is an administrative fine imposed by the tax administration.
The misdemeanour of tax loss essentially concerns the prohibition of conduct with a view to preventing a reduction in tax revenues.[2] What matters most in the misdemeanour of tax loss is that the correct amount of tax is accrued at the correct time.[3]
The Misdemeanour of Tax Loss is[4] , while the sanction is regulated in Article 344[5] regulated in the provision of Art. 341 VUK. As can be seen from the provision, the acts giving rise to tax loss are regulated exhaustively by enumeration. For these acts, the legislature imposes administrative fines at varying rates as the sanction.
The misdemeanour of irregularity is likewise regulated in Article 351 et seq. of the VUK[6] as general irregularities and special irregularities. According to its statutory definition, the misdemeanour of irregularity arises where the formal and procedural rules of the tax laws are not complied with. For this type of misdemeanour, the legislature has set out in detail which acts will give rise to the misdemeanour of irregularity and the corresponding sanctions.
Looking at the manner in which this misdemeanour, as regulated in the law, is committed, the State Treasury does not suffer a direct loss of tax; rather, a loss of tax may arise indirectly as a result of the irregularity committed. Nor is it necessary to be a taxpayer in order to commit this misdemeanour; a citizen carrying out a consumer transaction may also commit it.
At the beginning of our discussion, a twofold distinction was drawn with the aim of achieving sounder results in the examination of recidivism. Since the tax misdemeanours have already been addressed, and in order not to broaden the scope of the subject, the misdemeanours will not be described again; instead, the manner in which the recidivism provisions apply will be set out.
For the purposes of our study, it is useful to note that tax misdemeanours are also referred to in legal doctrine as tax offences of a financial nature. It would be appropriate to offer an explanation on the following point. In terms of the structure of the legislation, although the Law on Misdemeanours is the general law, it contains no provisions on recidivism. This does not mean, however, that recidivism provisions will not apply to tax misdemeanours. For these misdemeanours, Article 339 of the Tax Procedure Law will apply.
“Where those on whom a penalty has been imposed for causing tax loss or for irregularity, and whose penalty has become final, are again penalised within five years in the case of tax loss, or within two years in the case of irregularity, commencing from the beginning of the year following the date on which the penalty became final, the tax loss penalty shall be applied increased by fifty per cent and the irregularity penalty increased by twenty-five per cent.”
Vergi Usul Kanunu, m. 339
With regard to special irregularities, Article 353 and Article 355 bis VUK do not provide for an increased penalty; instead, they separately specify the penalty to be imposed where the misdemeanour is repeated. There is no clear consensus as to whether this amounts to recidivism. There are also two views in legal doctrine on whether the special irregularity misdemeanour falls within the scope of recidivism.
First view · Recidivism does not apply
According to the authors who support the first view, the special irregularity misdemeanour does not fall within the scope of the recidivism rules, because the penalty to be imposed where the act is committed again in special irregularity misdemeanours is specifically regulated in Article 353 VUK. For this reason, special irregularity misdemeanours and other tax misdemeanours do not constitute recidivism in relation to one another.
Second view · Recidivism applies
According to the authors who defend the second view, the special irregularity misdemeanour also falls within the scope of recidivism. Since the irregularity misdemeanour is committed by failing to comply with the provisions of the tax laws relating to form and procedure, the special irregularity misdemeanour and the general irregularity misdemeanour must be assessed together for the purposes of the recidivism provisions. Moreover, neither Article 339 of the VUK nor Articles 353, 354 bis and 355, which regulate the special irregularity misdemeanour, contain any provision stating that special irregularity misdemeanours fall outside the scope of recidivism. For these reasons, the special irregularity misdemeanour should also be assessed within the scope of recidivism.[7]
In 1999, a number of amendments were made to Tax Procedure Law No. 213 by Law No. 4369. One of these amendments is Article 9 of Law No. 4369 concerning recidivism. Article 339 on recidivism in the current VUK derives from Article 9 of Law No. 4369. Before the amendment, the relevant provision read:
Text before Law No. 4369
“Where a person on whom a penalty has been imposed for smuggling, gross fault, fault or irregularity, and whose penalty has become final, commits an act of the same kind again within five years in the case of smuggling, gross fault and fault, or within two years in the case of irregularity, commencing from the beginning of the year following the date on which the penalty became final, the penalty shall be increased by one half in the case of smuggling, by one third in the case of gross fault and fault, and by one quarter in the case of irregularity.” This was the wording of the provision.
A comparison of the provision before and after the amendment shows that the terms smuggling, gross fault and fault were removed from the text and replaced by tax loss, and that the requirement that the first act and the second act be of the same kind in order for recidivism to apply was removed. In addition, whereas before the amendment the commission of a misdemeanour of the same kind within the periods specified in the provision was required for the recidivism provision to apply, after the amendment the imposition of a penalty for a misdemeanour of the same kind was deemed sufficient. [8]
TPL Art. 339 before and after Law No. 4369
| Before the amendment | After the amendment | |
|---|---|---|
| Types of misdemeanour | Smuggling, gross fault, fault and irregularity | Tax loss and irregularity |
| Being of the same kind | The first act and the second must be of the same kind | This requirement has been removed from the article |
| Aranan | Commission of a misdemeanour of the same type within the periods | Imposition of a penalty for a misdemeanour of the same type |
As a result of this amendment, the view has emerged that the type of recidivism in the provision has changed. Looking at the original version, it is evident that the penalties imposed and the unlawful acts had to be identical, and it therefore concerned special recidivism.
However, since the requirement that the acts be of the same kind has been removed from the provision, there are views that general recidivism will now apply. Interpreting the provision solely on the basis of its wording would not be very appropriate here; a more accurate conclusion will be reached through historical and teleological interpretation. Seen from this perspective, it is apparent that the law was simplified to meet the needs of the times and that the acts causing tax loss were merged into a single category. For this reason, special recidivism still applies, together with time-limited recidivism and national recidivism.
An examination of Article 339 of the Tax Procedure Law on recidivism shows that, for the penalty to be increased on the ground of recidivism, the following conditions must be met cumulatively: a) the misdemeanour must be of the type of tax loss or irregularity, b) the earlier and later misdemeanours must be identical, c) the offender must be the same person, d) the penalty for the earlier misdemeanour must have become final, and e) the later misdemeanour must occur within a certain period.[9]
Since the recidivism provision in the VUK can apply only to tax misdemeanours, an act constituting a tax misdemeanour must first have been committed. The tax misdemeanours regulated in the VUK are the misdemeanours of tax loss and irregularity.[10]
According to the express provision of Article 339 VUK, the first condition for the recidivism provision to apply is that the tax penalty for the previously committed misdemeanours must have become final before the stage at which the penal sanction for the new act is applied.[11] Accordingly, for the recidivism provision to apply, it is not sufficient that the earlier penalty has been imposed and served. The penalty must also have become final. A penalty becoming final means that it can no longer be the subject of a dispute and has become collectable.
In this respect, it is necessary to know the circumstances in which penalties imposed for tax misdemeanours become final. A penalty imposed for a tax misdemeanour becomes final in the following cases:
Pardoned sentence
It is also useful to note under this heading that, since a general amnesty covering the final penalty for the relevant misdemeanour eliminates the penalty and all its legal consequences, a penalty covered by an amnesty will not be taken as a basis for recidivism.
This subject was touched upon when the amendments to Article 339 VUK were explained. Since the rationale of recidivism is that the penalty incurred by a person for a previously committed misdemeanour was insufficient and that a heavier penalty must be imposed so that the same misdemeanour is not committed again, the same misdemeanour must be committed again for the recidivism provisions to apply.[13]
Here, the requirement that the earlier and later misdemeanours be identical is also evident from the sanctions set out in the wording of the law. “Where a penalty is imposed again within five years in the case of tax loss, or within two years in the case of irregularity” By this wording, and by the use of the word “again”, it is indicated that the same misdemeanour must be committed.[14]
Although there are views that the same misdemeanour must not be committed, these views are largely based on certain changes to the statutory wording introduced by Law No. 4369. However, considering the matter even from a practical standpoint, where the first misdemeanour is tax loss and the second is irregularity, the irregularity will be taken as the basis for recidivism if it is committed within five years. Conversely, where the first misdemeanour is irregularity and the second is tax loss, the period to be taken as the basis for recidivism will be two years. This will therefore give rise to an injustice in terms of penal justice.[15]
The person who committed the first misdemeanour and the person who committed the second misdemeanour must be the same.[16] This emerges as a manifestation of the principle of individual criminal responsibility. There will undoubtedly be no hesitation on this point with regard to natural persons. With regard to legal persons, however, where the misdemeanour is committed by the statutory representative of the taxpayer company and a penalty is imposed, the statutory representative may change if the company is subsequently transferred. For this reason, applying the recidivism provisions to the transferee on account of a penalty belonging to the transferred company, where the transferee commits the same misdemeanour again, would be contrary to the principle of individual criminal responsibility.
Council of State decision
In this context, the Council of State has required, for the recidivism provisions to apply to tax misdemeanours under Article 339 VUK, that the acts constituting the tax misdemeanour be repeated by the same person. It has held that the recidivism provisions cannot apply where the earlier act was committed in respect of a general partnership, while the later act was committed by an ordinary partnership that is a partner of the same company.[17]
Article 339 VUK provides that “…where a penalty is imposed again within five years in the case of tax loss, or within two years in the case of irregularity, commencing from the beginning of the year following the date on which the penalty became final…” it is stated that recidivism may arise. For this reason, as can be seen from the provision, a time period is prescribed for recidivism. Different periods are set for the two misdemeanours: a longer interval is allowed for tax loss, whereas a shorter interval applies to irregularity.
The following question may arise here: as is known, a tax loss penalty also arises from the offence of tax evasion. In that case, the penalty is imposed at three times the principal tax. However, where the simple form of the misdemeanour is committed, the tax loss penalty imposed is equal to the principal tax.
The provision does not draw a direct distinction between these two situations. It therefore follows from the wording of the law that where the first misdemeanour caused a tax loss arising from tax evasion, the recidivism provisions will also apply where the second tax loss misdemeanour arises from the simple form.
Although this is a contentious matter, it has also been decided by the Constitutional Court following an application to it by way of concrete norm review. The court raising the objection applied to the Constitutional Court on the ground that the recidivism provision in Art. 339 VUK was contrary to the Constitution. As the ground of unconstitutionality, the applicant court relied on the wording of the provision “by providing, in relation to the increase of the penalty to be imposed on account of recidivism, that the penalty shall be increased where a penalty is imposed again on those on whom a penalty has been imposed for causing tax loss or for irregularity and whose penalty has become final, the time at which the act relating to the penalty to be increased on account of recidivism was committed is of no significance. Consequently, the date on which the act requiring the penalty to be increased on account of recidivism was committed may be earlier than the date on which the act relating to the previously imposed penalty was committed.” On this reasoning, the applicant stated that Article 339 of Tax Procedure Law No. 213 was contrary to Articles 2 and 38 of the Constitution. However, the Constitutional Court, having examined the application on the merits, held that “in the impugned rule, which provides that the penalties shall be increased where persons on whom a tax loss penalty or an irregularity penalty has been imposed are again subjected to a tax loss penalty or an irregularity penalty within a certain period from the date on which those penalties became final, it is natural that the later act to be taken as the basis for the recidivism provision must in any event have occurred on a date after the date on which the penalty imposed for the first act became final. Therefore, the rule is not vague or unforeseeable, and it cannot be said that the rule is contrary to the principle of legality of offences and penalties.” On these grounds, it ruled that Article 339 VUK, which was the subject of the application, was not contrary to the Constitution.[18] As can be seen from the reasoning of the decision, the misdemeanour to which recidivism is to be applied must occur on a date after the first misdemeanour.
As can be seen from Article 339 VUK on recidivism in tax misdemeanours, the consequence of recidivism is that the penalty to be imposed for the second misdemeanour is increased. The relevant part of Article 339 VUK provides: “…where a penalty is imposed again, the tax loss penalty shall be applied increased by fifty per cent and the irregularity penalty increased by twenty-five per cent.” is the wording of the provision. As can be seen from the provision, a higher rate of increase applies to tax loss. A longer period was also provided for.
TPL Art. 339’s recidivism period and rate of increase
| Tax loss | Irregularity | |
|---|---|---|
| Recidivism period | Five years starting from the beginning of the year following the date on which the penalty became final | Two years starting from the beginning of the year following the date on which the penalty became final |
| Rate of increase | Fifty per cent | Twenty-five per cent |
Discretion
Where recidivism arises in respect of tax misdemeanours, the relevant penalty is to be imposed without any discretion being granted to the Tax Office.
There is a special rule on the amount of the penalty for a general irregularity misdemeanour committed again within the same calendar year following an earlier general irregularity misdemeanour. As is known, the general rule under Article 339 VUK for general irregularity misdemeanours is that the penalty for the second misdemeanour is imposed increased by 25% of the original amount. Here, however, where the misdemeanour for which the first penalty was imposed is committed more than once of the same kind, one quarter of the penalty for the first is imposed. This is regulated in Article 337/1 VUK.
Article 337/1 VUK «Separate penalties shall be imposed for tax loss or irregularities committed separately. However, where any of the irregularities set out in Article 352 is committed more than once of the same kind within the same calendar year, one quarter of the penalty for the first shall be imposed for each of the subsequent ones.»
Article 352/1 VUK, in stating “Procedural irregularities shall be penalised according to the degrees set out below and the schedule annexed to this law. If the act of procedural irregularity requires an ex officio assessment, the penalties set out in the annexed schedule shall be imposed at double the amount.” , provides that penalties shall be imposed at twice the amount for irregularities where the act has been assessed ex officio. Here, practice and the views of the Council of State diverge in cases of recidivism.[19] This is because, under the recidivism provisions (Art. 339 VUK), there is disagreement as to whether, for irregularities requiring ex officio assessment, the increase should be applied to the original penalty or to the double penalty specially imposed.[20]
The Council of State’s view
The Council of State’s view indicates that, in the case of recidivism, the penalty to be imposed should be determined by applying the increase to the principal tax.
Tax Office practice
The Tax Office, on the other hand, imposes penalties in this manner on the basis that, for irregularities assessed ex officio, the increase should be applied to the penalty imposed under the double-penalty rule set out in Art. 352/1 VUK.
[1] Funda BAŞARAN YAVAŞLAR, “Vergi Ceza Hukuku’ndaki Değişim Süreci ve Bu Sürecin Vergi Ceza Sistemine Etkileri”, Vergi Sorunları Dergisi, No. 233, February 2008, pp. 73-78.
[2] Şenyüz, op. cit., Vergi Ceza Hukuku (Vergi Kabahatleri ve Suçları), p.91
[3] Öz Yilmaz, Tuğba; “Vergi Cezalarında Özellikli Hususlar”, Vergi Sorunları Dergisi, Issue 311, August 2014, p.37
[4] Article 341 – Tax loss means that tax is not accrued on time or is accrued incompletely because the taxpayer or the person liable for tax has failed to perform their taxation-related duties on time or has performed them incompletely. Causing tax to be accrued incompletely or refunded unjustly through false declarations concerning personal, civil or family status, or by other means, shall also be deemed tax loss. In the cases set out in the preceding paragraphs, the subsequent accrual or completion of the tax, or the recovery of an unjust refund, shall not preclude the application of a penalty.
[5] Article 344 – (Amended: 22/7/1998-4369/11) (Amended, first and second paragraphs merged: 23/1/2008-5728/275) Where tax loss is caused in the cases set out in Article 341, a tax loss penalty equal to the amount of the tax lost shall be imposed on the taxpayer or the person liable for tax. Where tax loss is caused by the acts set out in Article 359, this penalty shall be applied at three times the amount, and at the single amount to those participating in such acts. For tax returns filed after the statutory deadline, excluding those filed after the commencement of a tax inspection or referral to the assessment commission, the penalty to be imposed under this article shall be applied at fifty per cent. (Last paragraph repealed: 11/8/1999-4444/14)
[6] Article 351 – Irregularity is the failure to comply with the provisions of the tax laws relating to form and procedure.
[7] AHMET BOZDAĞ, Türk Ceza Hukukunda Ve Vergi Ceza Hukukunda Tekerrür (Afyonkarahisar Örneği), Unpublished Master’s Thesis, Afyonkarahisar, 2008, p. 102
[8] Küçükkaya, op. cit., Vergi Ceza Hukuku’nda Tekerrür, p. 195
[9] Şenyüz, op. cit., p. 256
[10] Küçükkaya, op. cit., Vergi Ceza Hukuku’nda Tekerrür, p. 197
[11] Mert Silahşör, Vergi Hukukunda Tekerrür Kurumu, Ankara Barosu Dergisi, 2013/2, p. 286
[12] Bayram Gülçiçek, Vergi Usul Kanununa Göre Tekerrür Ve Fiil Ayrılığı Müessesesinin Birlikte Uygulanması, Vergi Raporu Dergisi, Issue 179, August 2014, p. 58
[13] Ahmet Ak, Vergi Ceza Hukukunda Tekerrür Hükümlerinin Vergi Cezaları Açısından Değerlendirilmesi, Eskişehir Osmangazi Üniversitesi İİBF Dergisi, December 2015, 10(3), p. 264
[14] Rençber, op. cit., Vergi Ceza Hukukunda Tekerrür, p.80
[15] Merve Fulya Kaya, op. cit., Vergi Ceza Hukukunda Tekerrür, p.80
[16] RENÇBER, op. cit., Vergi Ceza Hukukunda Tekerrür, p.82
[17] Decision of the 3rd Chamber of the Council of State dated 14.4.1988, E. 1987/2104, K. 1988/1191
[18] Constitutional Court, Plenary, Docket No. 2009/51, Decision No. 2010/73, 20.5.2010
[19] Council of State, 4th Chamber, Docket No. 1969/1590, Decision No. 1971/2183
[20] Şenyüz, op. cit., Vergi Kabahatlerinde Tekerrür, p.263
Related legislation: Tax Procedure Law No. 213 (mevzuat.gov.tr)
Under Art. 339 of the VUK (Tax Procedure Law), where a person whose penalty for tax loss or irregularity has become final is penalised again within five years for tax loss, or within two years for irregularity, counted from the beginning of the year following the date on which the penalty became final, the new penalty is applied with an increase.
VUK m. 339’a göre vergi ziyaı cezası yüzde elli, usulsüzlük cezası yüzde yirmi beş oranında artırılarak uygulanır.
Yes. According to the article, it is not sufficient that the previous penalty was imposed and served; it must have become final. Finality occurs through payment without objection, expiry of the period for filing an action, exhaustion or non-use of legal remedies, or payment after a tax settlement (uzlaşma) or a penalty reduction.
According to the article, since a general amnesty of a final penalty eliminates the penalty and all its legal consequences, a penalty covered by an amnesty is not taken into account for recidivism.
Doktrinde iki görüş vardır: birine göre tekrar hâlindeki ceza VUK m. 353’te özel olarak düzenlendiğinden tekerrür uygulanmaz; diğerine göre usulsüzlüğün türleri birlikte değerlendirilmeli ve özel usulsüzlük de tekerrür kapsamında sayılmalıdır.
Yes. According to the article, this requirement is an expression of the principle that penalties are personal; the Council of State decision cited also requires that the acts be repeated by the same person.
Hayır. Makalede aktarılan AYM kararına (E. 2009/51, K. 2010/73) göre sonraki eylemin, ilk eylem için verilen cezanın kesinleşme tarihinden sonra gerçekleşmesi gerektiğinden kural belirsiz ve öngörülemez sayılmamış, Anayasa’ya aykırı bulunmamıştır.
Consultation request
As UTU Hukuk Danışmanlık, we provide legal and advisory services in the fields of tax and administrative law.
Fill in the form and we will call you. You can also contact us directly: