Turkcell to Challenge Prepaid Card Sales Tax Demand
Published on: 3rd Jan 2014
By: Ian Mansfield
Turkey's Turkcell has been hit with an unexpected tax demand of TRY527.7 million (USD243 million) covering prepaid card sales through distributors.
The company disclosed that it is required to pay an additional Special Communication Tax (SCT) of TRY211.1 million in principal and a tax penalty of TRY316.6 million, totaling TRY527.7 million.
Turkcell says that it already pays tax calculated on the wholesale cost of the cards it supplies to its distributors. However, there now appears to be an ambiguity in the tax legislation about whether it is liable for tax on the retail price market up applied by the distributors as well.
Turkcell said that it will seek its legal rights regarding this tax imposition of principal and penalty.