NEWSLETTER-2019-metin

323 TAX LAW • Taking into account the economic conjuncture, exchange differences may be also negative; therefore, it cannot be eva- luated to be in the same nature as late interest. Another tax case has been also initiated with the cancellation claim of the relevant part of the VAT General Application Commu- niqué. As a result of its examination, the case filed with the request for the cancellation of the relevant part of the VAT General Applica- tion Communiqué, which is based on the Communiqué of the pres- ent opinion of the Administration, which regulates that the exchange differences should be subject to VAT, 4th Chamber of the Council of State decided on the refusal of the cancellation claim. However, during its appeal examination, the Plenary Session of the Tax Law Chamber has reversed the decision of the 4th Chamber of the Council of State with its decision dated 13 December 2017 and number E. 2017/548, K. 2017/606 on the following grounds: • Under Article 24/c of the VAT Code that lists the items to be included in the VAT base, exchange differences are not indicated; • The interpretation and enlargement of a law provision thro- ugh communiqué, especially the essential items of taxation, is contrary to the legality of tax principle. Law No. 7161 Following the above-summarized decision of the Plenary Ses- sion of the Tax Law Chamber dated 13 December 2017, numbered E. 2017/548, K. 2017/606, it was expected that if no new legal arrange- ments are made, it is unlikely for exchange differences to be included in the scope of the VAT base. However, contrary to expectations, and in spite of the decision of the Plenary Session of the Tax Law Chamber, through the promulgation of Law No. 7161, it is currently clearly regulated that exchange differences should be included within the scope of VAT base as per Article 24 of the VAT Code. As a result of this new legislation, in one sense, the decision of the Plenary Session of the Tax Law Chamber is legally “deactivated”.