DEDUCTION WITHOUT NAME: CULTURE FUND

Ömer Haluk TURANLI
UGM Education Consultant

It can be said that the article title is inconsistent. We are actually talking about a fund that has no name but is called the "Culture Fund". However, the subject of our article is “Culture Fund” in the second paragraph of Article 44 of the Law on Intellectual and Artistic Works No. 5846. “All kinds of carrier materials such as blank video cassettes, audio cassettes, computer diskettes, CDs, DVDs, and all materials used to reproduce intellectual and artistic works.” Natural and legal persons who manufacture or import various technical devices for commercial purposes, by deducting the amount to be determined by the decision of the President, not to exceed three percent of the manufacturing or import price, and transfer the amount they have collected during the month to a special account to be opened in a national bank in the name of the Ministry of Culture, by the half of the next month at the latest. It is defined as "they are obliged to deposit".

 The same definition is also included in the "Decision on the Determination of Deduction Rates to be Made in the Manufacturing or Import of Technical Devices for the Reproduction of Intellectual and Artistic Works and Empty Carrier Materials" numbered 2187. There is a bet that the deduction mentioned in neither the title nor the text of the decision is a "fund". However, through the practical solution found by the sector, the outage was mentioned with the name of the relevant ministry; It was defined as a "fund" and the child's name was given: "Cultural Fund".

The Cultural Fund is paid during the import phase of devices such as mobile phones, printers and printing machines, internal memories such as hard disks, audio and/or image recording devices, CDs, DVDs or similar carrier materials, portable memories (e.g. Flash memory), radio and television. must be. In this respect, although the Cultural Fund seems like one of the taxes collected upon entry into free circulation, it is not actually an import tax.

The list attached to Decision No. 2187 indicates which materials and devices will be manufactured or imported and at what rate the Cultural Fund will be collected. The list annexed to the decision is included at the end of our article.

As a result of the latest amendment made in the Decision No. 2187 regarding the Cultural Fund, it is not checked at the import stage whether the fund payment has been made or not, and the declaration of the importer has become essential. Therefore, during the importation of such devices, the relevant fund must be calculated and deposited into a special account opened in the name of the Ministry in a national bank determined by the Ministry of Tourism and Culture. One quarter of these amounts collected in the special account is transferred to the Central Accounting Office of the Ministry of Culture and Tourism and recorded as income in the budget. Whether the payment has been made or not is determined after the import, through investigations, inspections and inspections carried out by the inspection staff of the public administrations in accordance with their own legislation; If it is determined that the payment has not been made or has been made partially, the situation is reported to the Ministry of Culture and Tourism.

In the Decision No. 2187, it was also stipulated that the amounts determined to have not been deposited on time or deposited incompletely would be collected in accordance with the provisions of the Law No. 6183 on the Collection Procedure of Public Receivables. In the decision, the goods subject to fund deduction were classified in 8 groups. Some of these items are outside the scope of the fund. For example, among the goods defined under GTIP numbers 8527.13.00.00.00, 8527.21 and 8527.91.00.00.00, "those that do not have the ability to save or reproduce" are excluded from the scope. The point to note here is that an out-of-scope application must be made for such goods and this declaration must be recorded in the relevant customs declaration. If the declaration that such goods do not have recording or reproduction features is not recorded in the relevant box of the customs declaration, there is a risk that importers will face additional accruals and fines on the grounds that there are goods with these features during the inspections.

The Cultural Fund is not defined as an import tax. As a matter of fact, the Cultural Fund is not included in the "Customs Duties" listed in Annex 1 of the Customs Settlement Regulation. Therefore, the Cultural Fund cannot be subject to reconciliation. In this respect, if non-payment or underpayment is determined after the declaration registration date, customs administrations should not issue additional accrual and penalty decisions regarding the cultural fund. As a matter of fact, in the letter of the Ministry of Culture and Tourism dated 20.01.2021 and numbered E-14282354-840-1055861, it was confirmed that the Culture Fund is not an import tax.

However, since the mentioned fund is included in the VAT and SCT base on imports, the Cultural Fund should also be added to these bases during the registration of customs declarations. In this context, it is possible that customs taxpayers may be subject to additional VAT and SCT accrual and related fines regarding the Cultural Funds that are determined not to be included in the VAT and SCT base.

There are also several aspects of the issue that are not clearly included in the legislation and need to be interpreted on a case-by-case basis. The first of these is whether fund collection will be made when temporary importation is made.

In this case, the question of whether it needs to be secured even if it is not collected may arise. However, it is clearly stated in the Customs Settlement Regulation that the Cultural Fund is not a customs duty. In the temporary import regime, there is a requirement to obtain a guarantee for the amount of "customs duties" that have not been collected. In this regard, since the Cultural Fund is not a customs tax in temporary import regime applications, it should not be subject to collateral.

It is also worth mentioning whether the goods within the scope of the list will be subject to the Cultural Fund when they are in the status of Outward Processing Regime, Temporary Export and Returned Goods.

Goods subject to the Outward Processing Regime or temporarily exported will be brought back to the country either after being subjected to processing abroad or in the same form as they were exported. In this regard, in both cases, the goods will not be considered "exported goods" and the Cultural Fund will have to be paid for these goods by the fifteenth day of the month following the month in which the production is completed. Naturally, since no fund exemption is provided for the goods in question when they go abroad and the return of goods in the Outward Processing Regime or Temporary Export status is not considered "entry into free circulation", no Cultural Fund payment will be made for these goods at the import stage.

The status of items with Returned Item status is different. The goods were first sent abroad as "definitive export"; Either the goods were returned because the buyer could not be found abroad, or the buyer returned the goods because he found them defective. Most likely, the Cultural Fund was not paid for this exportable item. The hesitations that occurred in the Izmir Customs Consultants Association regarding the issue were asked to the Ministry of Culture and Tourism; In its letter dated 20.01.2021 and numbered E-14282354-840-1055861, the said Ministry stated to the Association that there was correspondence with the Ministry of Commerce on the subject; The Ministry of Commerce stated that the Cultural Fund is not within the scope of import taxes; In this regard, exemption provisions regarding import duties cannot be applied to the cultural fund; Therefore, it is stated that the Cultural Fund deduction should be made from the import of the goods within the scope of Article 168 of Law No. 4458, and further in the article, it is stated that "In addition, in subparagraph (a) of the second paragraph of Article 1 of the Decision No. 2187, it is stated that all kinds of technical devices used for the reproduction of carrier materials and intellectual and artistic works are manufactured." Those who submitted were made liable 'to the exclusion of those who were expelled'. This being the case, considering that the goods manufactured domestically and sent abroad by export, 'except for those exported', are exempt from the deduction, if the goods in question are brought back into the country by importing, these goods will be within the scope of import deduction and the cultural fund payment for these goods will not be made. It is stated that it is necessary to do so.

We also agree with the evaluations in the article of the Ministry of Culture and Tourism. Therefore, if a Cultural Fund deduction is not made for the exported goods after manufacturing, this fund must be paid at the import stage. However, since it is not known whether the goods in question will be exported or not during the manufacturing phase, if the Cultural Fund payment has been made, a copy of the receipt for this payment should be added to the declaration at the registration stage of the declaration regarding the returned goods, thus preventing duplicate payment and this amount should not be included in the VAT and SCT base.

Source:

• Customs Law No. 4458
• Law on Intellectual and Artistic Works No. 5846
• “Decision on the Determination of Deduction Rates to be Made in the Manufacturing or Import of Technical Devices for the Reproduction of Intellectual and Artistic Works and Empty Carrier Materials” No. 2187
• Customs Reconciliation Regulation (O.G. No. 28038 dated 27.08.2011)
• The letter of the General Directorate of Copyrights of the Ministry of Culture and Tourism, dated 20.01.2021 and numbered E-14282354-840-1055861, addressed to the Izmir Customs Consultants Association.

LİSTE