Compliance simplification: Ending forms Ba and Bs reports on sales and purchase transactions
Turkey’s Revenue Administration has announced a significant regulatory change regarding tax reporting requirements for businesses.
A draft communiqué has been prepared, which proposes terminating the requirement for taxpayers to submit Notification on Purchases of Goods and Services (Form Ba) and Notification on Sales of Goods and Services (Form Bs). There is an open public consultation until mid-next week. The new measure then comes into effect from 1 October 2024.
These forms, currently required for businesses operating under the balance sheet principle, were instituted to track large transactions, where purchases and sales exceed TL 5,000 (approximately €133). The purpose of the change is to reduce tax compliance costs and obligations for taxpayers. This new regulatory framework is expected to take effect in October, for the September 2024 reporting month.
Turkey Ba and Bs reporting requirements
As per the current tax regulations in Turkey:
- Form Ba (Notification on Purchases of Goods and Services): This form is used by taxpayers who maintain their accounts on a balance sheet basis to report their purchases of goods and services from a single supplier or entity exceeding 5,000 TL, excluding VAT, within a single month.
- Form Bs (Notification on Sales of Goods and Services): Similarly, Form Bs is used by these taxpayers to notify the tax authorities about their sales of goods and services to a single buyer that surpass the same threshold of 5,000 TL within a monthly period.
These requirements have been in effect since 2008. Taxpayers engaged in international trade zones, known as free zones, along with those transitioning from enterprise accounting to balance sheet-based accounting, have been required to submit these forms. Additionally, entities such as collective companies and partnerships are also subject to the obligation.
Rationale for the Change
The primary objective behind eliminating these forms is to streamline the tax reporting process and alleviate the administrative burden on businesses. The forms were originally designed to ensure accurate tax reporting and to assist the Turkish Revenue Administration in monitoring significant commercial transactions, ensuring proper tax compliance.
However, over time, the obligations have become cumbersome for businesses. The requirement to submit these forms each month, particularly for larger companies with frequent and high-value transactions, contributes to compliance complexity and cost. Thus, the draft communiqué seeks to modernize and simplify the tax system by removing this requirement altogether.
