ANNOUNCEMENT ON "INFLATION ACCOUNTING APPLICATION" EVALUATION REQUEST SUBMITTED BY OUR ASSOCIATION TO THE T.R. MINISTRY OF TREASURY AND FINANCE

Dear Members,

As it is known, the "inflation accounting application" entered into force as of 31.12.2023. Our members have subjected their financial statements to inflation adjustment as of 31.12.2023 and submitted the inflation-adjusted version to the tax authorities as an annex to their 2023 tax returns.

Therefore, the actual application of inflation accounting adjustment starts in 2024. However, the Revenue Administration postponed the application of inflation accounting in the first provisional tax period of 2024 and decided that the first application will start with the corporate tax return on 31.12.2024.

At the point reached today, when inflation accounting adjustment is applied in the financial statements dated December 31, 2024;

1. In our members with a strong asset structure but weak capital structure (invested with loans in the past), as a result of inflation adjustment, inflation adjustment profits arise, and tax payment is in question on these profits, which are not actually obtained (profits arising from the increase in the value of assets in assets but not realized), which are fictitious,

2. On the contrary, it has been observed that our members with a strong capital structure, but who do not invest in fixed assets or who make such investments with their own resources, have incurred fictitious inflation accounting correction losses and deteriorated their financial statements, in addition to the profits they obtained at the end of 2024, and this deterioration has caused a loss of reputation both in the eyes of financial institutions and the sector.

Therefore, fictitiously calculated profits and/or losses distort the financial statements of all our members; they negatively affect the cash flow of our members who have to pay taxes on the fictitious profits arising from inflation adjustment and this situation causes unfair competition among our members. 

Stating that the tourism sector is one of the most important sectors in the fight against inflation due to the activities of our members, foreign currency inflow and employment, our Association has made a written request to the Republic of Turkey Ministry of Treasury and Finance to evaluate the issue once again so that our members' activities are not adversely affected by the inflation adjustment application, they can survive and not suffer irreparable losses.

Sincerely submitted for your information.

Association of Turkish Travel Agencies
TÜRSAB