Value added tax refund application in Turkish tax system for exports

The spread rate of value-added tax (VAT) worldwide has been quite fast due to the advantages it offers to the tax system. One of the most significant impacts of VAT is observed in trade. At this point, the export exemption applied in VAT becomes crucial. Export transactions carried out in accordance with the relevant legislation are exempt from VAT. This relieves the tax burden on taxpayers, prevents double taxation, provides a source of funds for taxpayers through refunds, and ultimately encourages exports and trade. This study aims to identify the fundamental issues related to VAT exemption and refund systems in exports in Turkey and provide practical solutions to address these issues. To achieve this goal, the study conducted a review of the relevant literature and examined both national and international judicial decisions on the subject. Qualitative research methods, specifically interviews with certified public accountants, were employed in the study. Participants were selected using purposive sampling, a type of criterion sampling. According to the research findings analyzed in conjunction with theory and judicial decisions, in Turkey, one of the most significant problems encountered in the VAT refund system for exports is the conflict between legislation and implementation. It has been observed that the tax administration uses its dependent administrative power or discretionary authority in a manner that leads to conflicting legal precedents. The process for realizing VAT refund requests can be lengthy, and it has been found that the deadlines stipulated in the legislation are not adhered to in the approval of refund requests. Additionally, many of the examined judicial decisions in the study revealed that the primary issue arises from the conflict between implementation and legislation. Divergence in jurisprudence among judicial authorities is a significant problem. The issue of 'insufficient investigation' is a major problem identified both in judicial decisions and the qualitative research results. The method of conducting a contrasting examination should be changed. The regulation of many aspects, especially the application of special principles, in tax notifications that affect the essential elements of taxation is inconsistent with the principle of legality in taxation.