Tax evasion

Avoiding tax evasion

Turkish law states that property owners must declare

• The actual property value to their local TAPU office
• The actual price paid by the buyer

If you do not declare the correct amounts, you are likely to run into difficulties, most likely in the form of punishing fines when you are discovered.

Fines for tax evasion

Your penalty is dependent on whether

• You have mistakenly evaded tax due to misleading or incorrect information (you must take a petition to the TAPU and tax office informing them of these events
• The tax evasion is discovered by the tax inspectors or
• Someone else informs the authorities about your tax evasion
• The seller of your property informs the authorities about your tax evasion.

If the first point applies to you, your penalty will be lower than in the other circumstances. The penalty arises when the title deeds are transferred into your name – even if the evasion isnt found till later on. The principal is the amount of tax evaded as well as administrative penalties as detailed in Turkish tax laws.

If you dont pay straight away, a late penalty of 2.5% each month is added on to the principal. You also run the risk of being added to financial black lists, which may mean you are refused for loans or credit cards in the future.

Tax is always a confusing business and its best to consult an expert if you have any questions. Our experts are very knowledgeable in this field and are happy to answer any questions.

Double check your TAPU

Ensuring the information is correct on your TAPU will prevent you from falling victim to money launderers. The property market is very closely watched by the government, and if there are any inconsistencies, the authorities will notice.

Here are a few things you can do to protect yourself from fraud:

• Ensure the prices shown in the sales contract match the figures given on the TAPU and any tax documents
• Keep all invoices and receipts pertaining to the purchase, including those from your translator, solicitor or other professionals you employ
• Never under-declare the price of a property, this is fraud
• Pay the money owing on your purchase into one account only. If your seller instructs you to the contrary, they may be trying to avoid paying tax, which will eventually implicate you.