YMM (Sworn - In Certified Public Accountant) Certification Reports Implementation Guide: Income And Corporate Tax Exemptions And Deductions (Communiqué No: 49)

1. Introduction: Overview of the New Certification Requirement

The 49 numbered General Communiqué on the Law of Sworn-in Certified Public Accountancy and Certified Public Accountancy, published by the Ministry of Treasury and Finance, signifies a fundamental change in Turkey's tax practices. This regulation shifts the benefit derived from certain tax advantages from an inherent right to a conditional state, dependent on an assurance provided by a Sworn-in Certified Public Accountant (YMM). By making the use of specific exemptions and deductions declared by income and corporate tax payers conditional upon the submission of a certification report prepared by a YMM, the regulation aims to guarantee the accuracy of the tax base. This not only reshapes the declaration processes for taxpayers but also assigns a more critical role to YMMs in the oversight of the tax system.

The main purpose of this guide is to enlighten YMMs and taxpayers, in a practical and understandable language, about the entire process, from preparing the certification agreement to determining the minimum content of the report, conducting audit procedures, and finally submitting the report electronically to the administration. Correct understanding and implementation of the obligations introduced by the Communiqué are vital for taxpayers

to fully and timely exercise their legal rights. The legal framework and application details to be discussed in the subsequent sections of the guide will enable this process to be managed smoothly.

2. Legal Framework and the Purpose of the Certification Requirement

The strategic importance of the new certification requirement stems from its solid legal foundation. This regulation is not an arbitrary practice; it has been put into effect within the scope of the powers granted to the Ministry of Treasury and Finance by the Tax Procedure Law and Law No. 3568. This legal legitimacy reinforces the regulation's place and binding nature within the tax system.

The legal bases of the Communiqué and its relation to these regulations are as follows:

• Article Repeated 227 of the Tax Procedure Law No. 213: This article authorizes the Ministry of Treasury and Finance to make the utilization of provisions such as exceptions, exemptions, and deductions in tax laws conditional upon the submission of a certification report prepared by a YMM. Communiqué No. 49 is a direct result of this authority.
• Article 12 of the Certified Public Accountancy and Sworn-in Certified Public Accountancy Law No. 3568: This article allows the Ministry to determine the procedures and principles regarding the subjects to be certified by YMMs. The Communiqué regulates the content, submission method, and other application details of the certification reports in line with this authority.

In light of this legal framework, as stated in Articles 3 and 7 of the Communiqué, the main purpose of income and corporate tax certification is to determine the accuracy, legal compliance, and reflection of the actual situation of the exemptions and deductions included in the taxpayers' declarations. The ultimate goal is to increase tax justice and the reliability of the system by assuring the accuracy of the tax base. This means that the tax administration shares its audit burden through YMMs and establishes a proactive audit mechanism in areas of high-risk exem

ptions and deductions. How this legal infrastructure will operate in practice for income and corporate tax payers will be discussed in detail in the following sections.

3. Guide to

the Certification Process for Income Tax Payers

The new certification requirement introduced for income tax payers adds a new audit and approval mechanism to the process of benefiting from exemptions and deductions exceeding certain monetary thresholds. This section aims to clarify, with practical steps, the circumstances under which the certification requirement arises, the minimum information the report must contain, and how it should be submitted.

3.1. Income Tax Exemptions, Deductions, and Applications Covered by Certification

Pursuant to the Communiqué, a YMM certification report is mandatory for taxpayers who benefit from the exemptions, deductions, and applications listed below and included in the annual income tax declaration:

3.2. Monetary Thresholds and Conditions Initiating the Certification Requirement

It is mandatory for taxpayers to have a YMM certification report prepared if any of the following conditions are met in their annual income tax declarations to be submitted starting from the 2025 calendar year:

• The amount of each exemption or deduction listed in the table above, which has a separate line in the declaration, alone exceeds 500,000 TL.
• Although the amounts of the exemptions and deductions on separate lines do not exceed 500,000 TL individually, the total amount of these exemptions and deductions exceeds 1,000,000 TL.
• The amount written on either the "Other Deductions" or "Other Exemptions" lines of the declaration, or the total of these two lines, exceeds 1,000,000 TL.
• The total of the exemption/deduction amounts on separate lines and the amounts written on the "Other Deductions" and "Other Exemptions" lines exceed 1,000,000 TL.
• In the case of benefiting from the reduced income tax application within the scope of Article 32/A of Law No. 5520, there is a certification requirement regardless of any amount limit for the tax reduction utilized.

Unless a different determination is made by the Ministry, these amounts will be updated in the following years by increasing them at half the revaluation rate. It is also important to note that taxpayers not covered by the mandatory scope can also have a certification report prepared voluntarily within the procedures and principles specified in this Communiqué.

3.3. Minimum Content of the Income Tax Certification Report

The certification report to be prepared by the YMM must contain the following minimum information and analyses to provide full assurance regarding the accuracy of the declaration:

• Determination of Compliance with Legal Books and Documents: The certification information of the legal books and whether the underlying documents for the records comply with the procedures and reflect the truth must be determined.
• Compliance with Legislation and Calculation Control: It must be checked whether the transaction subject to the exemption or deduction meets all the conditions specified in the relevant legislation and whether the calculations are accurate.
• Determination of Revenue and Earnings: It must be verified whether the exempt earnings have been obtained in the manner foreseen by the relevant legislation and within the legal time limits.
• Analysis of Documentation and Accuracy of the Amount: It must be analyzed whether the expenditure, cost, and earnings amounts underlying the exemption or deduction are substantiated by the correct documents.
• Conclusion Section: The report must include a conclusion section where the compliance of all examined issues and the actual situation with the accounting records is confirmed, and the amounts of exemptions and deductions are clearly stated by their subjects.

3.4. Submission of the Report: Process and Timing

The submission of the report, which is the final step of the certification process, is subject to specific rules and deadlines.

The report must be sent electronically via the digital tax office. The final submission date for the report is together with the annual income tax declaration for the relevant calendar year or within two months following the end of the declaration submission period.

Important Note: Taxpayers with a "Full Certification" Agreement

Taxpayers who have signed a "full certification" agreement with a YMM for their annual income tax declarations are not required to submit a separate certification report for the exemptions and deductions covered by this Communiqué. However, to benefit from this advantage, they must include all the information requested in this Communiqué in the relevant section of their full certification reports without any omissions. A similar process applies to corporate tax payers, and the relevant details will be discussed in the next section.

4. Guide to the Certification Process for Corporate Tax Payers

The certification obligations that corporate tax payers must comply with are parallel to the income tax application but differ in terms of the exemptions they cover, special conditions in monetary thresholds, and waivers. This section explains the certification process for tax advantages included in the corporate tax declaration, considering the specific rules for corporations.

4.1. Corporate Tax Exemptions, Deductions, and Applications Covered by Certification

Pursuant to the Communiqué, a YMM certification report is mandatory for the exemptions, deductions, and applications listed below and included in the corporate tax declarations to be submitted starting from the 2025 accounting period:

4.2. Monetary Thresholds and Special Conditions Initiating the Certification Requirement

For corporate tax payers, the financial conditions initiating the certification requirement, valid starting from the 2025 accounting period, are as follows:

• The amount of each exemption or deduction listed in the table above, which has a separate line in the declaration, alone exceeds 500,000 TL.
• Although the amounts of the exemptions and deductions on separate lines do not exceed 500,000 TL individually, the total amount of these exemptions and deductions exceeds 1,000,000 TL.
• The amount written on either the "Other Deductions and Exemptions" or "Other Deductions" lines of the declaration, or the total of these two lines, exceeds 1,000,000 TL.
• In the application of the reduced corporate tax rate within the scope of paragraphs six, seven, and eight of Article 32 of Law No. 5520, the total tax reduction utilized exceeds 200,000 TL.
• In the case of benefiting from the reduced corporate tax application within the scope of Article 32/A of Law No. 5520, there is a certification requirement regardless of any amount limit.
• In the local and global minimum complementary corporate tax applications within the scope of Additional Articles 1 to 13 and Temporary Article 17 of Law No. 5520, there is a certification requirement for the calculated amounts regardless of any amount limit.

Special Condition: Public Economic Enterprises (KİT) and their establishments are not obliged to have a YMM certification report prepared for the transactions covered by this Communiqué.

4.3. Minimum Content of the Corporate Tax Certification Report

The minimum content required in the corporate tax certification report is largely the same as the conditions specified for the Income Tax Certification Report. The YMM is required to examine and report in detail the compliance of legal books and documents, compliance with legislation, accuracy of calculations, and whether the transactions reflect the actual situation. The main difference is that the underlying legislation for the audit is the Corporate Tax Law No. 5520 and related communiqués.

4.4. Submission of the Report: Process and Timing

The process for submitting the corporate tax certification report is parallel to the income tax application but includes a special condition:

• Standard Submission Date: The report must be submitted electronically via the digital tax office together with the corporate tax declaration for the relevant accounting period or within two months following the end of the declaration submission period.
• Special Condition: The report prepared for the earnings exemption of Real Estate Investment Funds or Partnerships under Article 5/1-d-4 of Law No. 5520 must be submitted within three months following the declaration submission period.

As with income tax, taxpayers who have a "full certification" agreement for their corporate tax declaration are not required to submit a separate report, provided they include all this information in their full certification reports. The role and responsibilities of the YMM, the most important actor in this process, will be detailed in the next section.

5. Responsibilities of the Sworn-in Certified Public Accountant and the Audit Process

The certification process is not merely the act of preparing a report, but a comprehensive audit and assurance activity conducted by the YMM. The role of the YMM, which ensures the quality and reliability of this process, involves clearly defined responsibilities determined by the legislation. A YMM is more than a report preparer, they are an independent audit expert who confirms the accuracy of the declared tax advantages.

5.1. Preparation of the Certification Agreement

The first official step of the certification process is the conclusion of an agreement between the taxpayer and the YMM. Pursuant to Article 11 of the Communiqué, the content of this agreement is of particular importance.

The following phrase is mandatory to be written in the "Subject of Certification" section of the certification agreement to be drawn up: "Income/Corporate tax exemption, deduction and application certification agreement"

5.2. YMM's Obligation to Examine and Audit Techniques to be Applied

Article 12 of the Communiqué places extensive authority and responsibilities on the YMM to investigate the accuracy of the exemptions and deductions subject to certification. The YMM is obliged to use all kinds of documents and apply all kinds of examination techniques to determine the actual situation. The fundamental audit techniques that must be applied in this context are:

• Cross-Check: Investigating whether documents related to goods, services, and cash movements confirm each other by comparing them with debt-receivable relationships.
• Analytical Review: Analytically testing the production quantity in manufacturing enterprises by comparing it with the capacity report, actual raw material consumption, and other technical data.
• Comparison: Auditing the consistency of information in documents such as invoices by comparing it with external documents such as customs declarations and foreign exchange purchase documents.
• Investigation of Fake and Misleading Documents (SMİYB): If suspicion arises that the examined documents are fake or misleading in content, investigating the validity of the document by obtaining information from tax offices or other public institutions. 

5.3. Effects of Joint and Several Liability

Article 12 of the Communiqué clearly defines joint and several liability, which is one of the most critical consequences for YMMs. This reveals the extent of the financial and legal risk borne by the YMM regarding the transactions they certify.

YMMs are jointly and severally liable with the taxpayer for the taxes lost, penalties related to these taxes, and delay interest calculated due to the incorrectness of the certification they perform. This responsibility emphasizes the importance and seriousness of the report signed and the audit performed by the YMM. However, it should be remembered that this heavy responsibility is limited only to the scope of the exemptions and deductions certified by the YMM. This heavy responsibility directly affects the depth of the techniques the YMM will apply in the audit process and the quality of the evidence they will collect, transforming the certification service from standard reporting into a comprehensive risk management activity.

6.Consequences of Not Submitting the Certification Report on Time

The failure to submit the certification report within the legal period under the Communiqué should be considered not as a simple procedural deficiency, but as a critical error that eliminates the fundamental legitimacy of the tax advantage utilized and leads to irreversible loss of rights. This situation is not viewed merely as a procedural error but directly affects the right to benefit from the tax advantage.

The consequences specified in Article 13 of the Communiqué operate as a two-stage process:

1. Granting of Additional Time: If the report is not submitted within the legal period, the tax administration grants the taxpayer a grace period (additional time) to submit the report pursuant to the Tax Procedure Law. This is a final opportunity for the taxpayer.
2. Loss of Right to Benefit: If the certification report is not submitted to the administration even within this additional period, the taxpayer completely loses the right to the exemption or deduction subject to certification. This means that the amount arising from the relevant tax advantage is added to the tax base, and an additional tax assessment is made.

In addition to this serious consequence, it should not be forgotten that a special procedural irregularity penalty specified in the Tax Procedure Law No. 213 will also be applied to the taxpayer who fails to submit the report on time. Therefore, following the certification process and submitting the report on time is critically important.

7. Conclusion and Practical Checklist

The new certification requirement introduced by the Ministry of Treasury and Finance with Communiqué No. 49 is an important step aimed at increasing transparency and accuracy in tax declaration processes. This regulation strengthens the reliability of the tax system by subjecting the utilization of tax advantages exceeding certain monetary thresholds to a stricter audit mechanism. The correct management of this process, which brings new responsibilities for taxpayers and YMMs, is vital to prevent the loss of rights.

Below is an action-oriented checklist summarizing the entire process for taxpayers and YMMs:

• Step 1: Scope Analysis:

At the end of the year, carefully check whether the income or corporate tax exemptions and deductions you utilize exceed the monetary thresholds specified in the Communiqué.

• Step 2: Agreement:

If you determine that your certification obligation has arisen, immediately draw up an "Income/Corporate Tax Exemption, Deduction, and Application Certification Agreement" with a YMM to avoid missing the legal deadlines.

• Step 3: Audit and Reporting:

Provide the legal books, invoices, contracts, and all other information and documents requested by the YMM for the audit process completely and on time. Ensure that the report is prepared in accordance with the minimum conditions specified in the Communiqué.

• Step 4: Electronic Submission:

Confirm with your YMM that the prepared certification report has been submitted electronically via the Digital Tax Office within the legal period of two months (or three months in special cases) following the declaration submission period.

• Step 5: Alternative Path ("Full Certification"):

If your company has a "Full Certification" agreement with a YMM, remember that you do not have an obligation to prepare a separate report. However, closely coordinate the process with your YMM to ensure that all information regarding the exemptions and deductions you utilize is included in the full certification report without any omissions.