Invitation to Explanation of Voluntary Tax Compliance

Abstract

Some disagreements and differences of opinion may arise between taxpayers and tax administration due to taxation process or practices. A peaceful resolution of these disputes by the parties of taxation ensures the administration to gain the tax claims as soon as possible; additionally, it brings some advantages for the taxpayers and particularly it plays a vital role in ensuring voluntary tax compliance. “Invitation to explanation”, which is one of the regulations for the resolution of disputes at administrative level, provides an opportunity for enhancing the voluntary tax compliance, which is defined as on time and in full meeting of the taxational liabilities by the taxpayers. With this implementation, which is resolved at the 370 th article of the Tax Procedure Law, an opportunity is given to the taxpayers, who caused tax losses according to the preliminary detections applied by the competent authority demonstrating indications about tax loss, to make explanation before facing a criminal action, provided that tax audit or fixation transactions are not started and no notifications are made until the detection date. With this implementation, it is aimed at providing a decrease and a resolution of the disagreements between the parties of taxation at administrative process, ensuring a rapid and efficient taxation process, enabling the participation of the taxpayers in resolution of disagreements, and thus increasing the voluntary tax compliance. In this study, the implementation of invitation to explanation, which is one of the administrative resolution methods, will be examined; firstly, invitation to explanation notion and its application in Turkish tax system will be clarified, and subsequently some assessments will be made about the implementations of invitation to explanation within the framework of the voluntary tax compliance.