7 mins readVUK (Tax Procedure Law): What Is It? All You Need to Know about VUK Communiqués 507 and 509
January 13, 2025
The Tax Procedure Law (VUK) is foundational legislation accepted in 1961 that shapes the functioning of the Turkish tax system. VUK plays a key role in regulating tax procedures and combines all processes taxpayers encounter when fulfilling their tax obligations under a single standardized framework. In recent years—especially due to digitization—taxpayers have been granted easier and faster ways to perform transactions, and applications like electronic invoicing, e-ledgers, and e-archives have been legalized within the scope of VUK. In this Papel Blog article, we discuss the history of VUK, its core principles, its impact on businesses and individuals, current developments, and how to align with digitization.
What Is VUK (Tax Procedure Law)?
The Tax Procedure Law (VUK) is the fundamental legal framework that sets out the principles and procedures of tax practices in Turkey. Enacted in 1961, this law aims to ensure the tax system operates orderly and equitably. As the cornerstone of Turkey’s tax regime, VUK is central in coordinating tax practices. It is crucial for standardizing tax practices and clarifying taxpayers’ obligations, covering issues such as the imposition, accrual, collection, and notification of taxes, statutes of limitations, bookkeeping responsibilities, document organization, and tax penalties. Providing a standardized framework for tax procedures promotes transparency and predictability for both the tax authority and taxpayers. Equally, VUK is vital for ensuring tax fairness and supporting taxpayers in correctly and promptly meeting their obligations.
What Is the Purpose of VUK?
The Tax Procedure Law (VUK) is the main legislative text establishing the rules and principles for tax practices in Turkey. Its primary goal is to structure tax processes so the tax system functions effectively and fairly. VUK encompasses taxes, fees, and charges that contribute to the central government’s budget and those collected by special provincial administrations and municipalities. By regulating every stage of tax procedures, this law allows the tax system to function holistically. In addition to dealing with tax assessment, accrual, collection, and notification procedures, VUK also addresses bookkeeping responsibilities, document organization, and tax penalties. These regulations enhance the efficiency of tax practices, thereby encouraging compliance.
What Are the Core Principles of VUK?
VUK is based on certain core principles. These principles ensure that Turkey’s tax system operates fairly, transparently, and effectively, meeting the state’s financial needs while maintaining a balanced arrangement of taxpayers’ rights and obligations. Here are the central principles underpinning the Tax Procedure Law, which strives to keep the tax system fair, transparent, and efficient:
- Principle of Legality
- Principle of Universality and Equality
- Principle of Financial Capacity
- Principle of Equitable and Balanced Distribution of Tax Burden
- Principle of the Rule of Law
Principle of Legality
Legal taxation applies here: taxes can only be introduced, altered, or abolished by law. This principle prevents arbitrary tax practices and ensures legal certainty.
Principle of Universality and Equality
Everyone is required to pay taxes by their financial capacity. This principle aims to distribute the tax burden equitably across all segments of society.
Principle of Financial Capacity
Taxation is carried out by considering taxpayers’ ability to pay, thereby ensuring tax fairness. This principle aims to set tax burdens in line with people’s economic situations.
Principle of Equitable and Balanced Distribution of Tax Burden
The objective here is to distribute the tax burden fairly and proportionately among society. As an extension of the social state philosophy, this principle requires tax policies to serve social objectives.
Principle of the Rule of Law
This refers to the government’s use of its taxation authority within a legal framework. Upholding the rule of law in tax practices protects individual rights.
How Does the Tax Procedure Law Affect Businesses and Individuals?
The Tax Procedure Law (VUK) imposes various obligations and regulations on businesses and individual taxpayers to ensure compliance with the tax system. Businesses must adapt to the digitization process by implementing applications such as e-Invoice, e-Ledger, and e-Archive. These solutions accelerate tax procedures by enabling the creation and storage of documents in a digital environment, thereby streamlining audit procedures. However, companies should consider setting up the necessary digital infrastructure and submitting their returns on time to avoid potential penalties. On the other hand, individuals need to be mindful of the electronic notification system, accurately declare their income, and easily leverage digital platforms to manage tax procedures.
What Is a VUK General Communiqué?
General Communiqués of the Tax Procedure Law (VUK) are official regulations that outline the procedures and principles of tax practices in Turkey and explain how VUK should be implemented. Published by the Ministry of Treasury and Finance or the Revenue Administration (GİB), these communiqués guide taxpayers and other relevant stakeholders. You can easily find them in the Official Gazette and learn about their details. Issued to ensure that tax practices remain current and accurate, they serve as a vital guide for taxpayers in meeting their obligations. Generally, these communiqués aim to establish the application guidelines of tax laws, announce legislative updates, and provide taxpayers with the necessary information to fulfill their tax obligations properly.
What Is VUK Communiqué No. 507?
One of the notable communiqués regulating digitization and electronic document management in Turkish tax practices is General Communiqué No. 507, covering the “Secure Mobile Payment and Electronic Document Management System” (GMÖEBYS). This communiqué targets the digital transformation of payment collection and issuing financial documents for goods and services transactions. GMÖEBYS is made available to taxpayers via authorized institutions and entities designated by the Ministry of Treasury and Finance.
What Is VUK Communiqué No. 509?
Another communiqué crucial to digitizing Turkey’s tax practices is General Communiqué No. 509, which lays out the procedures and principles for electronic document practices. This communiqué specifies the terms for issuing, transmitting, and storing digital documents such as e-Invoice, e-Archive Invoice, e-Dispatch Notes, and e-Self-Employment Receipts (e-SMM). Under Communiqué No. 509, taxpayers who meet certain conditions must transition to the e-invoice system.
Other Communiqués That May Interest You
Beyond General Communiqués No. 507 and 509, several other communiqués under the Tax Procedure Law (VUK) also play a key role in Turkey's digitization of tax practices. Here are a few examples:
General Communiqué No. 552 of VUK
This communiqué introduced the “Digital Tax Office” application, enabling taxpayers to handle tax-related procedures swiftly and securely in an electronic environment. Through the Digital Tax Office platform, taxpayers can file returns, pay debts, obtain status letters regarding their tax obligations, and perform similar transactions online.
General Communiqué No. 456 of VUK
This communiqué establishes and regulates the electronic notification (e-Notification) system. By sending tax notifications to taxpayers electronically, the e-notification system facilitates faster and more effective processing of notification procedures.
H2: VUK and Recent Developments
Tax legislation in Turkey undergoes constant revision in response to economic and technological changes. Consequently, the Tax Procedure Law (VUK) itself undergoes various amendments. Digitization, in particular, has ushered in significant reforms within VUK, aiming to make tax processes more efficient, transparent, and auditable by encouraging taxpayers to follow and adapt to new changes.
RegTech (Regulatory Technology) solutions play an important supportive role in digitizing tax processes by enabling the effective use of technology. In this regard, the Revenue Administration (GİB) launched the Digital Tax Office platform, which lets taxpayers handle their tax transactions swiftly and securely online. In addition, with recent changes to VUK, transitioning to electronic document and ledger systems has become mandatory. For instance, under General Communiqué No. 509, taxpayers exceeding a specified annual revenue threshold must switch to e-Invoice and e-Ledger systems. Meanwhile, regulatory changes within VUK have laid the legal groundwork for digital invoicing and record-keeping solutions like e-Invoice, e-Ledger, and e-Archive.
These solutions simplify the entire process by enabling taxpayers to manage their document issuance, storage, and submission responsibilities online. Specifically, taxpayers surpassing certain revenue thresholds must move to e-Invoice and e-Ledger.
The information presented in this blog post is general and does not constitute legal, financial, or investment advice. The content is provided for informational purposes only, and it is recommended that you seek professional advice for your specific circumstances. The statements in this text do not create any binding effect or liability, as they merely reflect the author’s views. You bear full responsibility for any decisions you make, and Papel Elektronik Para ve Ödeme Hizmetleri A.Ş. accepts no liability in this regard.