STAMP DUTY ON FUEL GIVEN TO SHIPS

Remzi AKÇİN
UGM Board Chairman

According to the provisions of articles 176 of the Customs Law and 476 to 482 of the Customs Regulation, fuel is provided to ships voyaging outside the Turkish Customs Area. This transaction, also called “bunkerage”, is carried out by exporting fuel in free circulation or delivering fuel not in free circulation to ships in accordance with the transit provisions.

Whether the transit declaration issued in the event that fuel not in free circulation is re-exported as fuel to ships voyaging abroad will be exempt from stamp duty has become a matter of debate.

Article 176 of the Customs Law No. 4458 states; “1. Fuel and oil used by ships, boats, other sea vehicles and airships on foreign voyages and provisions brought from abroad, provided that they are not landed, are exempt from import duties.

               2. Fuel and oils and provisions in warehouses that have not yet entered free circulation shall be given to the vehicles specified in paragraph 1 according to the transit provisions.

The provision of fuel and oils and provisions in free circulation to ships, boats and other sea vehicles and airships that set out on foreign voyages shall be deemed as exports”.

The provisions of both the Customs Law and the Customs Regulation have regulated the distinction between export and re-export according to whether the goods are in free circulation or not. The sale and delivery of goods in free circulation outside the Turkish Customs Territory is an export transaction and is carried out with an export declaration. The sale and delivery of goods not in free circulation is re-export, in other words, transit trade, and is carried out with a transit declaration. Articles 176 of the Customs Law and 476 to 482 of the Customs Regulation have also regulated the issue in this manner.

On the other hand, in additional article 2/1ç of the Stamp Duty Law No. 488; “Export and papers issued for the transactions listed below, provided that they are related to export (including declarations submitted to customs authorities) are exempt from stamp duty. … ç) Purchase and sale of goods subject to transit trade” is included in the provision. According to this provision, declarations submitted to customs authorities for the purchase and sale of goods subject to transit trade are exempt from stamp duty.

In parallel with this, the “Communiqué on Tax, Duty and Charge Exemption in Export, Transit Trade, Sales and Deliveries Considered as Export and Foreign Exchange Earning Services and Activities” numbered (EXPORT: 2017/4) published in the Official Gazette dated 18.05.2017 and numbered 30070, includes provisions regarding tax, duty and charge exemptions in export and transit trade.

In the 5th article of the Communiqué, it is stated that in case of purchase and sale of goods subject to transit trade, tax, duty and fee exemptions will be applied ex officio by the institutions performing the transaction to the declarations submitted to the customs administration without seeking a “tax, duty and fee exemption certificate”.

While the provisions of both the Stamp Duty Law and the Communiqué numbered (EXPORT: 2017/4) are so clear, there are problems in applying the stamp duty exemption due to the fact that the export of fuel cannot be documented due to the expression “export and in case of documentation of being related to export” in the law and the communiqué.

The export transaction is defined in Article 3/1-f of the aforementioned Communiqué as; “f) Export: The removal of a good outside the Turkish Customs Territory or to free zones in accordance with the Export Legislation and Customs Legislation in force or other exits and transactions that will be accepted as export by the Ministry…”

From this definition, it is understood that what is meant by export within the scope of the communiqué is the exit of the goods outside the Turkish Customs Territory. When evaluated from this perspective, it is a requirement of customs legislation that fuel is taken into the warehouse with a warehouse declaration, taken out of the warehouse with a transit declaration and delivered to the ship, that these transactions and the ship leaving the Turkish Customs Area are carried out under the supervision and control of the customs administration, and that this situation is documented in the declarations. It is not possible to claim the contrary. The contrary situation constitutes a violation of the Law No. 5607 on Combating Smuggling. Therefore, the exit of fuel outside the Turkish Customs Area is documented with customs records and documents.

If the expression “export and proof of export” refers to the issuance of an export declaration for goods, then it will not be possible to grant tax exemption to transit trade. This situation would mean “not allowing the right granted by law to be used” or “ignoring the will of the legislator”. Because, in transit trade, in other words, “re-export”, the export declaration cannot be used. Export declarations are prepared for goods in free circulation, and export declarations cannot be prepared for goods not in free circulation.

On the other hand, it is not correct to claim that fuel deliveries made as “re-export” with a transit declaration are not transit trade. In this case, there will be no area to be considered as “transit trade”.

In fact, the General Directorate of Customs, with its letter dated 25.02.2015 and numbered 6211349, stated that; “Accordingly, for customs declarations regarding fuel and mineral oils delivered to Turkish flagged sea and air vehicles and foreign flagged sea and air vehicles that set off abroad (except for those delivered within the scope of maintenance and repair);

- Within the scope of export for fuel and mineral oils in free circulation,

- Within the scope of transit trade for fuel and mineral oils purchased from abroad, from a real or legal person or warehouse located in a free zone and delivered without entering free circulation,

It was stated that ex officio stamp duty exemption should be applied provided that it is documented that it is related to export ……..”, and it was reported that these deliveries are within the scope of transit trade.

When all these issues are evaluated together, it is understood that transit declarations prepared for the delivery of fuel oil not in free circulation to ships as fuel within the scope of transit trade are exempt from stamp duty.

It is concluded that the expression “documentation of export” confuses people both in the Stamp Duty Law No. 488 and in the Communiqué No. (Export: 2017/4) and correspondence, and that the situation of proof is perceived as documenting the transit transaction as export.

This situation reminds us once again that the expressions used in the legislation may create perception problems and therefore the regulations should be made in a way that does not leave room for interpretation.