Staying Updated. February Tax Technology Newsletter

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1 Staying Updated Tax Technology Newsletter Dear Sir/Madam, In this issue We are aware of how challenging it is to achieve compliance in a continuously changing legal environment. Updates in the legislation and technical guidelines are so frequent and unexpected that companies must continously monitor every channel to ensure that they catch every new requirements before it is too late. As PwC Turkey, our purpose is to ensure that our clients are not significantly affected by this uncertainty. We support our clients by keeping track of all changes, following up any grey areas and proactively meeting with TRA to discuss the current gaps and expected developments. In this third issue of our Newsletter, we include details on the most recent updates with regards to e-transformation legislation and guidelines, but also provide insight on our informal meetings with TRA and 3rd party service providers. Kind regards, Cenk Ulu Partner Indirect Tax Services 1

2 E-Bookkeeping Have you begun preparations for the changes in the standard to be used in application? UBL TR 1.2 Standard to come into effect: As announced by the authorities on , the UBL-TR 1.2. schema that has been created in accordance with the UBL 2.1 standard and will go live as of at 10:00. Companies using e-invoicing application through direct integration shall start adjusting their systems accordingly immediately to be able to comply with the above deadline. Keep in mind that while in other cases the necessary developments will be conducted by the special integrators, companies will still need to update processes by mapping certain new fields. System Interruption on : It was announced one week in advance that the TRA e-invoicing system would be interrupted on between 08:00 and 14:00 for maintenance. Communiqué no. 397 sets forth that taxpayers who are authorized to issue e- Invoices are obligated to keep a sufficient amount of printed invoices in order to be able to issue invoices in the case of a malfunction or outage of their systems or in the application. In this regard, please note that TRA has verbally stated that parties registered for e-invoicing and e-archive applications may issue e-archive invoices instead of pre-printed invoices under such circumstances. Keep in mind that this information is still pending official publication in the legislation or technical guidelines. 2

3 Are you aware of the format requirements for storing your e- Archive Invoices? New Technical Guidelines It was published on February 27th a new document with several clarifications with regards to. These changes bring clarification to many grey areas in the legislation, but also include unexpected changes that companies will be expected to comply with at the earliest convenience. We include in the following pages a summary of the most relevant changes for general information purposes, yet we strongly recommend you to seek our professional advice for specific queries. organizationidentifier - the entity title shall exactly match the one in the Trade Registry Gazette. accountantname company s accountant name or sworn financial advisor name shall be included, depending on whether it keeps its ledgers internally or outsourced. accountantengagementtypedescription companies that keep their ledgers internally shall fill this field with «-». Otherwise, the exact engagement name and number shall be included. uniqueid this control number shall comply with a specific format to comply with the TRA s requirements (e.g. YEV ) entriescomment this field is also expected to comply with a very specific format (e.g. 1 Ocak Ocak 2011 arası A AŞ ye ait Yevmiye Defteri). sourceapplication companies should ensure that this field is in accordance with the specific format requested by TRA and that it includes the latest version of the e-bookkeeping solution being used. 3

4 New Technical Guidelines enteredby in cases where the entries are created automatically by the system or through batch process, it is possible to refer it instead of including a real person s name. documenttype it is stated that it is essential that companies show the information of every document in one journal entry. Still, whenever the explanations below conflict with the legislation, the last ones have primacy. Solution providers responsibility these shall validate the ledgers from a schematron perspective but must not conduct any changes in the ledgers content. Banking transactions source document for entries related to banking transactions shall be «bank receipts». These shall be recorded in e-ledgers with Other as documenttype, and Banka Dekontu in documenttypedescription. Respective number and date shall be included in the related fields. It is possible to record all bank transactions on a daily basis provided that these are separated by bank. In this case, it shall be recorded as Other in documenttype and Muhasebe Fişi in documenttypedescription. Expense Reports companies may use expense reports as a source document, provided these have a sequential number, a stamp and signature and are archived. This may be kept electronically if duly stamped with a fiscal stamp. However, if the expense has an invoice as source document, it must be recorded in a separate journal entry with Invoice as documenttype. Z reports Z reports created at the end of each day are recorded as Other in documenttype and Z Report as documenttypedescription with the respective number and date. Sales made during the day shall be separated in accordance with the payment methods on the Z report (cash, credit card, etc). VAT amounts shall also be in separate journal entries created for each of the payment methods. Check/Voucher Summaries companies will be able to record a check/voucher summary, provided it belongs to the same recipient and sender. As above, these should be given a sequentail number, a stamp and signature and duly archived. 4

5 New Technical Guidelines Payroll companies will be able to record a payroll summary. As previously referred, these should be given a sequential number, a stamp and signature and duly archived. Self-employment vouchers this is a documents issued for collections with regards to the operations by selfemployed professionals. This document should not be confused with «receipt» document type included in the e-ledger guides. Since self-employment voucher is not included in the list of document types, this should be recorded as Other in documenttype and Serbest Meslek Makbuzu as documenttypedescription with the respective date and number. Entry number control solution providers shall pay attention to the control of whether the entry number counter continues sequentially for the ledger parts that are created within the accounting period. In case it is determined that the entry number counter does not continue sequentially, an error message should be sent to the user and the correction of the mistake shall be enabled. Creation process of electronic ledgers Compliant software must check signed ledgers against updated schema and schematron controls. Due to the fact that these controls will be conducted by approved software, the responsibility shall belong both to the user and the approved software company. Summary files shall not be created for ledgers that have not passed the schema and schematron controls. Furthermore, the compliant software shall present detected errors to the user in a tidy and understandable fashion. After the errors have been corrected, the ledger should be created again and signed. It is necessary for the user to correct the errors that have been encountered during the schema, schematron or pre-control by the compliant software before the creation of the ledgers.. The compliant software should in no way intervene with the errors encountered on the data or the XML as a result of schema/schematron controls. The error messages shall be directed to the user directly and the user shall be enabled to correct these errors. 5

6 What is the status of the discussion with regards to New Generation Cash Register? Technical Guides updated: Technical Guides for New Generation Cash Register have been updated by TRA on February 6th. While there are still many grey areas with regards to this application, there are some important points to be considered during the implementation of New Generation CRDs. - Meal Card EBT devices should be connected to NGCRDs or their softwares should run on integrated EFT-POS devices. - In cases where an einvoice or earchive invoice is issued in retail, the information receipt generated by the NGCRD can be used as a delivery note. - Connection of NGCRD to ERP, POS Systems, Invoice printers etc. shall be compliant with GMP protocols. EFT-POS and EBT card systems after NGCRDs: 1) EFT-POS featured : Please note that the technical guides state that EFT-POS devices shall be able to support all bank applications along with food ticket applications. 2) Computer Connected : According to our verbal discussions with TRA, computer connected devices are expected to have one Point of Interaction and all banking applications shall be supported by this POI. 6

7 Latest meetings with TRA Based on our recent meetings with regards to, we have observed that solution providers generally have been offering two types of NGCRD solutions. Particularly relevant for companies in the retail sector, one of the solutions is to connect the already existing POS devices to the ERP system of the companies through GMP-3 connection. The second option is to connect POS devices to the TSM of the device producers. Recently, we have been observing a debate with regards to connecting the already existing devices through GMP-3, as the ERP of the company becomes an integral part of the connection, whether in such case certification from TÜBITAK will also be required for the ERP. Although the Authorities are yet to provide a specific answer to this question, it remains an important point due to the fact that in the case it is deemed that the entire ERP system of the company will need to be certified, this option will become an unattractive one due to the requirement of informing the Authorities and possibly having to obtain certification for every update made to the internal system of the ERP. On the hand, to connect the POS devices to the TSM of the Authority, a significant investment might be necessary We would also like to mention that although the deadline to start using NGCRDs is 1/1/2016, no computer connected device has obtained approval and therefore there are still many grey areas with regards to how the workflow of companies will be affected by the implementation of the NGCRDs. Another ongoing discussion pending definitive answer is whether the invoice numbers will need to be inputted into the NGCRDs. 7

8 Action Plan to Prevent Unrecorded How will sectors be affected by the Action Plan to Prevent Unrecorded? In January 2015, Action Plan to Prevent Unrecorded has been published by the Revenue Administration. Within the scope of the action plan, the scope of sectors to be included in the electronic transformation is planned to be broadened. In this regard, please find below some of the key issues set to be tackled by the Administration through the implementation of the mentioned plan. e-commerce Sector Amendments will be made in order to achieve the registration of intermediary institutions operating in the e-commerce sector in order to achieve their registry to electronic applications such as e-invoicing and obtain data electronically with the aim of tackling paralell economy and preventing tax loss. Tourism and Health Sector Amendments will be made in order to achieve the registration of intermediary institutions operating in Tourism and Health sectors in order to achieve their registry to electronic applications such as e-invoicing and obtain data electronically with the aim of tackling paralell economy and preventing tax loss. Internet Payments: Studies will be conducted in order to obtain data from banks and similar payment intermediaries in order to perceive payments made to and from social media institutions. After the analysis of the sector, related legislation and technical infrastructure will be amended with the aim of tackling paralell economy and preventing tax loss. Gas Stations Online data transfer from the NGCRDs attached to gas pumps to the database of the Revenue Administration will be achieved. Road Transportation Sector Through amendments to be made to the related legislation, necessary changes will be made to processes including intrainstitution data sharing in order to allow for the tracking of the transportation process of the goods from loading to their delivery. 8

9 Staying Updated Tax Technology Newsletter Cenk Ulu Parter Indirect Tax Services Tel: +90 (212) PwC Turkey The Indirect Tax team of PwC Turkey is the largest in the country with approximately 70 experienced professional staff and is currently providing tax advisory services to more than 700 companies. We are also the largest professional consulting firm in Turkey, in terms of the scope and quality of services provided. Combining local knowledge with international expertise enables our team to provide its clients with the highest possible level of service. PwC Turkey, operating since 1981, consists of five offices in Istanbul (2), Ankara, Izmir and Bursa. Cem Aracı Director Indirect Tax Services Tel: +90 (212) PwC Tax Technology Team PwC Tax Technology Team provides assistance and support with regards to tax implications during the implementation process of the newly introduced electronic applications. Hande Turkyılmaz Senior Manager Indirect Tax Services Tel: +90 (212)