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Halil İbrahim ŞAHİN
Import Coordinator
The customs value of imported goods is regulated in Articles 23 to 31 of the Customs Law No. 4458 and Articles 43 to 57 of the Customs Regulation.
Nowadays, we encounter two types of tax bases for imported goods in order to avoid underpayment of taxes during the payment of customs duties during import transactions. One of these is CIF value (FOB + Freight + Insurance + Expenses made abroad), which constitutes the basis of Customs Duty. Another one is the base formed according to Article 21 of the Value Added Tax Law. Accordingly, since all expenses incurred until the registration date of the declaration are included in the VAT base, expenses such as warehousing, storage, loading and evacuation, which are not taxed until the registration date of the declaration, must also be added to the VAT base.
According to customs legislation, the customs value of goods is the value determined for the purpose of implementing customs tariff and non-tariff regulations on certain issues related to trade in goods. The customs value of imported goods is the sales price of the goods. The sales price is the price actually paid or payable, in which necessary adjustments are made according to the elements to be added to the value specified in Article 27 of the Customs Law and the elements that will not be included to the value in Article 28 in the sale for export to Turkey.
The price actually paid or payable is the sum of the payments made or required to be made by the buyer to or for the seller's benefit for the imported goods. This price includes all payments made or to be made by the buyer to the seller or to a third party to meet an obligation of the seller, as a condition of sale of the imported goods. Payments can be made in the form of money transfer, or can be made directly or indirectly, using a letter of credit or a negotiable instrument.
While determining the customs value pursuant to Article 27 of the Law, the transportation and insurance expenses incurred for the imported goods to the port or place of entry in Turkey and the loading and handling expenses incurred for the transportation of the goods to the port or place of entry in Turkey are added to the price actually paid or payable for the imported goods.
However, Article 28 of the Law stipulates that transportation and insurance expenses incurred after the goods arrive at the place of entry into the Customs Territory of the Republic of Turkey and the customs zones of the Customs Union to which Turkey is a part of agreements, should not be included in the customs value, provided that they can be distinguished from the price actually paid or to be paid for the imported goods.
In practice, since it is not possible to distinguish the transportation and insurance expenses of the goods between the Customs Union Customs Area, to which Turkey is a part of the agreements, and other countries, these expenses are evaluated as a whole and included in the customs value. As a result, there is an increase in the VAT base of the goods. In addition to all these, all postal fees collected up to the place of delivery of the goods are included in the customs value, excluding additional postal fees charged in the import country.
It is also useful to approach the issue from the perspective of the Value Added Tax Law No. 3065. Tax base elements are listed in Article 21 of the said Law.
According to this:
1. a) The value of the imported goods on which the customs duty is assessed, the (CIF) value including insurance and freight costs if the customs duty is not collected on a value basis or if the goods are exempt from customs duty, and in cases where this is not clear, the value of the goods to be determined by customs,
2. b) All kinds of taxes, duties, duties and shares paid during import,
3. c) Other expenses and payments made until the registration date of the customs declaration, which are not taxed, and payments such as price difference and exchange rate difference calculated on the cost of the goods,
It is included in the tax base.
In this respect, the CIF value of the goods constitutes the main element of the base for VAT collected on imports. In addition, taxes, duties and funds paid during importation based on CIF value and taxes incurred for goods imported at home or abroad and included only in the VAT base (such as loading, unloading, storage fee, port services, demurrage fee, purchasing commission, analysis and control expenses). Expenditure items are also included in the base.
All expenses incurred until the registration date of the customs declaration, including storage fees paid to temporary storage areas, customs warehouses and customs areas where customs services are provided, and payments made for terminal services, must be included in the VAT base.
Meanwhile, demurrage fees that affect the customs tax base and VAT base should not be forgotten. This fee refers to the fee paid for maritime transportation due to the ship waiting at the loading/unloading port for longer than the time it has to wait for loading/unloading within the scope of the transportation contract. These demurrage charges, which occur after the ship docks at the port, must also be included in the VAT base.
Under normal circumstances, it is considered that there will be no tax loss as a result of including an element that should be included in the VAT base in the customs value, and in some cases, extra customs duty will even be paid. For example, if we accept that port expenses are declared as freight expenses, some shipping companies provide freight, loading, evacuation, etc. . Since the services are sent as separate items in a single invoice, all of these amounts must be included in the VAT base
As a result, in order for the VAT base of the goods actually imported to be declared correctly, the expenses mentioned in the transactions made until the registration date of the declaration and for which VAT is not accrued on the invoice must be included in the VAT base under the name "domestic expense" in the declaration of entry into free circulation.
These expenses should be investigated thoroughly and it should be examined whether the service occurred before or after the registration of the declaration. Otherwise, it is inevitable to face administrative fines arising from the fees for this service.
SOURCE:
Customs Law No. 4458
customs regulation
Value Added Tax Law No. 3065
QUESTIONS AND ANSWERS
Question 1. Will the expense on the demurrage invoice of goods sent with a container from Izmir port to the factory, covering the date after the registration date of the declaration, be included in the VAT base?
Answer: This demurrage payment does not fall into the VAT base.
Question 2. If an extra crane expense is paid during the evacuation of the goods before the declaration registration date, will it be included in the VAT base
Answer: Since the declaration is made before the registration date, it is included in the VAT Base.
Question 3. If handling has been done for the imported goods, should this service fee be added to the VAT base?
Answer: If the handling invoice is before the registration date, it is included in the VAT base; if it is after the registration date, it is not included in the tax base.
Question 4. Is it possible to face penal action if the transportation cost, which should be added to the customs value, is declared in TL by mistake, although it should be declared in EURO?
Answer: There is a high probability of facing criminal action in such a mistake.
Question 5. What is the legal basis for not accruing Value Added Tax without applying it on the invoice for storage services provided in customs warehouses and temporary storage places?
Answer: These services are exempt from VAT based on subparagraph (o) of the 4th paragraph of Article 17 of the Value Added Tax Law No. 3065.
