# 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) – 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)): 1. **Reference number** and date of issuance. 2. **Description of the pre‑assessment** and the tax loss amount(s) suspected. 3. **30‑day deadline** for the taxpayer to submit an explanation. 4. **Consequences** of not responding (automatic referral to audit). 5. **Penalty framework** – 20 % reduced penalty, possibility of 50 % discount or settlement. 6. **Instructions** on how to submit supporting evidence (books, invoices, electronic records). 7. **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**. --- ### **Reach us for tax advisory services** info@ozmconsultancy.com ![](https://cdn.hashnode.com/res/hashnode/image/upload/v1754446206839/b5602d8d-f7c2-40ca-babf-9ddd79133cee.png align="center")