Petition for Annulment of Penalty Notice

Petition for Annulment of Penalty Notice 

TO THE HONORABLE PRESIDENCY OF THE DUTY TAX COURT,
ANKARA

PLAINTIFF : ABC Construction Industry and Trade Ltd. Co. (in liquidation) Liquidator's
Name, Surname (Turkish Republic Identity Number) – Address

REPRESENTATIVE : Attorney Irem EPÇAÇAN – Address

DEFENDANT : … Tax Office Directorate – Address

SUBJECT OF THE LAWSUIT : This is our request for the annulment of the tax penalty notice with special irregularity penalty issued pursuant to Article 355 of the Tax Procedure Law, regarding the withholding tax for the year 2019, on behalf of our client company, whose tax liability continues in our capacity as liquidator .

NOTICE NUMBER SUBJECT TO LAWSUIT : …

AMOUNT OF TAX/PENALTY CLAIMED : … TL

DATE OF NOTIFICATION : … / … / …

EXPLANATIONS:

 The client company, "ABC Construction Industry and Trade Ltd. Co.", is in liquidation. The decision to begin liquidation was registered and announced in the trade registry on …/…/… date, and the company has effectively ceased its operations; since that date, it has not employed any workers, paid wages, made any self-employment payments, or made any payments subject to withholding tax.

The defendant Tax Office Directorate claims that a process was initiated regarding the submission of information and documents concerning the summary tax return and withholding tax for the 2019 calendar year for the client company; however, the client liquidator was not given a proper, clear, written, and time-bound notification , as stipulated in Article 355/1-1 of the Tax Procedure Law, regarding the imposition of a penalty if the obligation to provide information and documents is not fulfilled within the determined period. Despite this, the defendant administration, with the "Penalty Notice No. ... dated .../.../...", imposed a special irregularity penalty on the client company pursuant to Article 355 of the Tax Procedure Law , and this notice was served to me in my capacity as liquidator . This penalty notice is unlawful both procedurally and substantively. According to Article 355/1-1 of the Tax Procedure Law; In order to impose a special penalty for irregularities due to failure to provide information and submit documents, it is mandatory to apply to the taxpayer in writing , set a specific time limit , and clearly warn that a penalty will be applied if the submission obligation is not fulfilled within that period .

In this specific case, the client, the liquidator, was not given a written notification, clearly stating the date and deadline, stating that "you must submit these documents by this date, and if you fail to do so within this period, a special irregularity penalty will be applied in accordance with Article 355 of the Tax Procedure Law." An examination of the notifications in our file reveals that only general inspections and correspondence exist; there is no written request for information with a deadline and explicitly stating a threat of penalty under Article 355 of the Tax Procedure Law. Therefore, the penalty imposed without fulfilling the formal requirements stipulated by law is clearly contrary to the law . Tax penalties cannot be expanded by analogy or interpretation; strict adherence to the procedure prescribed by law is mandatory.

The inspection report , which forms the basis of the penalty in question , is submitted as an annex to our lawsuit. Examination of this inspection report clearly shows that the company is in liquidation, does not employ any workers, its construction or workplace activities have effectively ceased, and there are no payments or transactions requiring withholding tax. Withholding tax applies to payments such as wages, professional services, rent, etc. It is established by the inspection report and trade registry records that our client company, which is in liquidation, did not have such payments or activities during the relevant period. In this case, it is not possible to speak of a tax liability and related information/submission obligation regarding withholding tax. The tax administration, by imposing a penalty solely on the basis of the liquidator's capacity, has unlawfully placed our client under an obligation, even though no transaction giving rise to withholding tax actually occurred. The fundamental principle in tax law is that the actual and legal conditions for a material tax liability must be met ; it is not possible to impose a penalty based on a taxation event that has not occurred.

In companies undergoing liquidation, tax liability continues on the legal entity of the company ; the liquidator is the body responsible for representing and managing the company according to law and contract. Tax liability is corporate, not personal, and due to the principle of the personal nature of penalties, it is not possible to hold the liquidator liable for tax penalties in their own name. In the concrete case, the penalty notice was drawn up in a way that, in terms of its wording and content, was directed at the liquidator personally , resulting in the liability being attributed to the liquidator rather than the legal entity. This approach is clearly contrary to the tax liability regime and the principle of the personal nature of penalties. Moreover, the claim that the person acting as liquidator "violated the duty to provide information and documents" during a period when no transaction giving rise to withholding tax occurred is contrary to the factual circumstances . There is no fault or negligence attributable to the liquidator.

 In summary;

• Imposing a penalty without fulfilling the requirement of requesting written information within a specified timeframe and including a threat of penalty, as stipulated in Article 355 of the Tax Procedure Law ,
• The absence of any actual transaction requiring withholding tax according to the inspection report and registration records ,
• The penalty notice in question is unlawful in both procedural and substantive terms , due to the fact that the company in liquidation is effectively inactive and the liability was incorrectly directed to the liquidator personally . According to tax law and administrative judicial principles, the annulment of unlawful assessments and penalties is essential for protecting the taxpayer's property rights and the principle of legal certainty.
  

 

EVIDENCE:

• The penalty notice in question ,

• The relevant attendance sheet,

• Examples of trade registry gazettes related to liquidation ,

• All notifications and correspondence made within the scope of Article 355 of the Tax Procedure Law ,

• Tax office file,

• Expert examination and all necessary legal evidence, if deemed appropriate.

 

LEGAL GROUNDS:

Tax Procedure Law, Administrative Procedure Law and related legislation

 

CONCLUSION AND REQUEST:

For the reasons stated and explained above, and which your Court will consider ex officio;

1. On behalf of my client , ABC Construction Industry and Trade Ltd. Co., which is in liquidation, and in my capacity as liquidator, I request the annulment, both procedurally and substantively, of the tax assessment with special irregularity penalty, established pursuant to Article 355 of the Tax Procedure Law, by the penalty notice dated …/…/… and numbered … .

2. The court costs and attorney fees shall be borne by the defendant administration.

I respectfully request and demand that a decision be made.

History: … / … / …

Attorney
İrem EPÇAÇAN