Author: Canan Doksat
Introduction
Through the promulgation of the Law No. 7351, published in the Official Gazette dated 22.01.2022 and no. 31727, essential amendments are introduced to Turkish tax legislation. Apart from the tax amendments, a new provision has been added to Article 27 of the Administrative Jurisdiction Procedure Law no. 2577 (“AJPL”) titled as “Stay of Execution”. According to the newly added provision to the AJPL, taxpayers must deposit 50% of the actual tax amount in dispute as security in order to claim a stay of execution decisions during the tax cases initiated with the refund claim of the paid taxes. The above-mentioned security requirement should be analyzed in terms of the stay of execution institution envisaged for tax litigation procedure and constitutional rights.
Suspension of Execution Regime in terms of Tax Litigation Procedure
As per Article 27/1 of AJPL, initiation of a lawsuit at the Council of State or the administrative courts shall not prevent the execution of the administrative procedure in dispute. The Council of State or the administrative courts may decide to suspend the execution by showing justification if (i) the implementation of the administrative procedure both results in damage that are hard to recover or impossible to recover and (ii) the administrative procedure is expressly in contradiction to the law. According to Article 27/6 of AJPL, the stay of execution order shall be given after a financial guarantee is deposited. However, deposit of financial guarantee might not be sought, according to the requirements of the situation. This is the general rule for the “suspension of execution” in administrative jurisdiction.
On the other, Article 27/4 of AJPL stipulates an exemption of the above-mentioned general rule in terms of tax litigation cases. According to the referred provision, filing a tax lawsuit arising from tax disputes at the tax courts shall suspend the collection procedures of the part of the levied taxes, duties, charges and similar financial liabilities and the increases and penalties thereof which is the subject of the case.
