Declaring of the submissin of declaration with the presence of a mediation agreement between the independent audit company and the taxpayer company that it does not fall within the scope of incompatible activities with the audit, and this situation does not threaten the impartiality or independence of the independent auditing firm or the independent auditor.
BY THE ADMINISTRATIVE LAW DEPARTMENTS ASSEMBLY OF THE COUNCIL OF STATE, E, 2020/451 E., 2021/915 K. DATED 29.04.2021 DECISION;
The repeated 257th article’s 1st paragraph’s 4th clause of the 213 Tax Procedure Law provides the authorization for making regulations regarding declarations sent electronically to the Ministry of Finance. In the 340th serial numbered Tax Procedure Law General Communiqué issued by the mentioned Ministry, under the section titled ‘Real and Legal Persons Granted Mediation Authority,’ it is stated that, ‘It is deemed appropriate for certified public accountants and sworn-in certified public accountants authorized under Law No. 3568 on Certified Public Accountants and Sworn-In Certified Public Accountants to send taxpayers’ tax declarations, notifications, and supplements electronically.
Mediation-enabled professionals for electronic declaration submission are permitted to assist not only in sending declarations belonging to clients with whom they have service contracts but also to assist in sending declarations for individual clients making individual requests. Authorized professionals are required to arrange an ‘Electronic Declaration Mediation and Responsibility Agreement’ for clients with whom they have service contracts and an ‘Electronic Declaration Mediation Agreement’ for individual clients making separate requests, according to the attached regulations.
Under the VII. clause titled ‘Signing Declarations and Other Matters’ of the same Communiqué, it is mentioned that ‘Certified Public Accountants, Certified Public Accountant-Professionals, and Sworn-In Certified Public Accountants authorized for electronic declaration submission shall be jointly and severally liable with taxpayers for the payment of tax loss arising from inaccuracies between the information in taxpayers’ declarations and the book records and documents that form the basis of these records, due to the service contracts they have regulated with taxpayers.’
According to the conveyed legislation, declarations can be sent directly by taxpayers in electronic form or can be sent by certified public accountants, certified public accountant-professionals, and sworn-in certified public accountants authorized under an ‘agency contract’ within the framework of the mentioned Communiqué. Contracts signed by authorized professionals and their clients for electronic declaration submission are of two types: ‘Electronic Declaration Mediation and Responsibility Agreement’ for clients with whom service contracts exist and ‘Electronic Declaration Mediation Agreement’ for individual clients making separate requests.
The dispute arises from whether the provision of assistance solely for the electronic submission of tax declarations by professionals who undertook independent audit to their individual clients based on the ‘Electronic Declaration Mediation Agreement’ does or does not fall within the scope of incompatible activities with the audit, provided that there are no other service contracts between professionals and their clients, and no professional services such as bookkeeping, financial statement preparation, etc., are offered. This situation arises from whether it poses a threat to the impartiality or independence of the independent auditing firm or the independent auditor.
Accordingly, since it has been concluded that the act of professionals facilitating the electronic submission of tax declarations solely based on the ‘Electronic Declaration Mediation Agreement’ does not fall within the scope of incompatible activities with the audit, and there is no unlawfulness found in the decision of the Council regarding the case, the lawsuit has been dismissed.