Invitation to Explain (Izaha Davet) – The 2025 AI‑Powered Tax Procedure in Turkey
Invitation to Explain (Izaha Davet) – 2025 AI‑Enhanced Tax Procedure in Turkey | Dünya Gazetesi
Invitation to Explain (Izaha Davet) – 2025 AI‑Enhanced Tax Procedure in Turkey | Dünya Gazetesi
Invitation to Explain (Izaha Davet) – The 2025 AI‑Powered Tax Procedure in Turkey
| ✅ What it is | ✅ Who is targeted | ✅ Why it matters | ✅ Main benefit |
| An AI‑assisted “Invitation to Explain” (Izaha Daveti) where the tax authority asks a taxpayer to clarify possible tax loss indicators before an audit. | Taxpayers not yet under audit, no formal notice, and no pending tax‑assessment commission referral. | Increases voluntary compliance, cuts tax‑compliance costs, and offers reduced‑penalty relief when taxpayers cooperate. | Avoids full tax‑audit, limits penalties to 20 % (or 50 % with discount), and gives a clear deadline to submit explanations. |
1. What Is the “Invitation to Explain” (Izaha Daveti)?
Since August 6 2025, the Turkish Revenue Administration (GİB) has been using a machine‑learning‑driven system to flag taxpayers whose filings may indicate a loss of tax revenue. When a pre‑assessment (ön tespit) signals a potential issue, the authority sends an “Invitation to Explain” – a formal request for the taxpayer to provide a written or oral clarification within 30 days.
Legal basis: Article 370 of the Tax Procedure Law (VUK), Law 213. The rule was updated in 2020 and refined in 2025 with AI support.
2. Why the Authority Uses Izaha Daveti
| Goal | How Izaha Daveti Helps |
| Boost voluntary compliance | Taxpayers can clear up doubts without a full audit. |
| Reduce compliance costs | Faster resolution → less paperwork and lower administrative burden. |
| Combat the informal economy | Early detection prevents tax loss before it spreads. |
| Provide penalty relief | If the taxpayer’s explanation is satisfactory, penalties are capped at 20 % (or 50 % with a discount). |
3. Who Receives an Invitation to Explain?
A taxpayer will NOT be invited if any of the following already applies:
A formal tax investigation (İhbar) has been filed.
The tax audit process has started.
The case has been sent to the Tax Assessment Commission (Takdir Komisyonu).
Only those without a prior notice and without an ongoing audit are eligible for the invitation.
4. The Step‑by‑Step Process (2025)
| Step | Action | Deadline |
| 1️⃣ Pre‑assessment (Ön Tespit) | AI scans filings → flags potential loss. | Immediate (automated). |
| 2️⃣ Decision to Invite | The Pre‑assessment & Explanation Commission decides whether to issue an invitation. | Same day as pre‑assessment. |
| 3️⃣ Send Invitation (Izaha Daveti) | Formal letter (postal, registered mail, or electronic) with reference number and instructions. | Date of service = start of 30‑day period. |
| 4️⃣ Taxpayer’s Explanation | Submit written (signed) or oral (recorded) clarification. Supporting documents (books, invoices, contracts) may be attached. | Within 30 days of receipt. |
| 5️⃣ Commission Review | Evaluation of the explanation – can last up to 45 days after receipt. | Up to 45 days post‑submission. |
| 6️⃣ Outcome | • No tax loss confirmed → case closed. | |
| • Tax loss confirmed → penalties applied (20 % discounted, optional 50 % discount). | ||
| • Further investigation required → referral to audit or assessment commission. | Communicated by certified letter or electronic notice. |
5. What Must the Invitation Contain?
The letter must include at least the following items (per VUK 370(c)):
Reference number and date of issuance.
Description of the pre‑assessment and the tax loss amount(s) suspected.
30‑day deadline for the taxpayer to submit an explanation.
Consequences of not responding (automatic referral to audit).
Penalty framework – 20 % reduced penalty, possibility of 50 % discount or settlement.
Instructions on how to submit supporting evidence (books, invoices, electronic records).
Note that the pre‑assessment cannot be used to invoke the “remorse” provision under VUK 371.
6. How to Prepare a Strong Explanation
| Tip | Why It Helps |
| Use original documents (original ledgers, invoices, contracts). | Shows authenticity; AI can verify timestamps. |
| Provide a clear narrative linking each document to the flagged item. | Reduces ambiguity for the commission. |
| Submit electronically with a digital signature if possible. | Faster processing; automatically timestamps receipt. |
| Reference the exact article of VUK you are complying with. | Demonstrates legal awareness. |
| If you disagree, request a “settlement” (uzlaşma) – you can negotiate the discount. | May reduce the final penalty to 20 % or lower. |
7. Penalty Calculation (2025)
| Situation | Base Penalty | Discount Options |
| Confirmed tax loss | 20 % of the tax amount that would have been lost (reduced penalty). | • Remission (uzlaşma) – up to 50 % reduction. |
| • Penalty discount – applicable if explanation is accepted. | ||
| No explanation submitted | Full penalty (no discount) + interest per Article 51 of the Tax Procedure Law (Kanun 6183). | None – the case is automatically referred to audit. |
| Use of false documents (SMİYB) | 20 % penalty on top of the tax due; no settlement allowed after assessment. | None – settlement is prohibited for SMİYB cases, but discount still applies. |
Interest is calculated monthly on the overdue amount at the rate defined in Kanun 6183, Art. 51*.*
8. Frequently Asked Questions (FAQ)
| Question | Short Answer |
| Do I have to respond in writing? | No – oral explanations are accepted if recorded and signed in a protocol by the commission. |
| Can I use electronic mail instead of certified post? | Yes, as long as the delivery is traceable (registered e‑mail, e‑signature). |
| What if the tax loss is less than 700 000 TL? | You may still receive an SMİYB pre‑assessment, but the penalty is capped at 20 % and settlement is possible. |
| Is the “remorse” (pişmanlık) provision applicable? | No – the Izaha Daveti is expressly excluded from VUK 371’s remission rules. |
| What happens after the commission’s decision? | If the case is closed, no further action. If referred, a full audit or assessment commission review follows. |
| Can I appeal the decision? | Yes, through the normal tax court procedures after the commission’s final notice. |
9. Why This Matters for Your Business
Cost Savings: Avoid a full audit, which can cost thousands of TL in legal and accounting fees.
Predictability: A fixed 30‑day response window lets you plan resources.
Risk Management: Early clarification reduces the chance of a larger penalty later on.
Compliance Boost: Demonstrating willingness to cooperate can improve your standing with the tax authority in future audits.
10. Bottom Line
The 2025 AI‑assisted Invitation to Explain is a powerful tool for both the Turkish Ministry of Finance and taxpayers. By acting promptly, providing a clear, well‑documented explanation, and leveraging the available discount mechanisms, businesses can avoid costly audits, limit penalties, and maintain a clean compliance record.
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