Special Principles Are Gone, the List Remains; the Court Asked for a Legal Basis

In value added tax refunds, the "special principles" were for years among the practices taxpayers litigated most. With Communiqué Serial No. 52, published in the Official Gazette of 31 October 2024, the section of the VAT General Implementation Communiqué on special principles was repealed; a new section titled "Those Whose Refunds Are Subject to Tax Audit" took its place. But did the legal problem disappear when the name changed?

The Ankara 8th Tax Court gave a clear answer to this question with its decision of 30 October 2026, E. 2026/248, K. 2026/1095. The Court unanimously annulled the act by which a company was placed on the list of those whose "refund claims will be concluded according to audit" and recorded as having an adverse finding of using false or misleading documents.

The Administration's First Defence; There Is No Actionable Act

The defendant administration first argued that there was no enforceable act capable of being the subject of an administrative action. Since the special principles had been repealed, the taxpayer could not be within them; according to the administration, no such list even existed. The Court did not accept this procedural objection. Moreover, the statement of defence and its annexes showed that the taxpayer had been placed on the list of those whose refunds are subject to audit because of findings relating to 2023 and 2024.

This outcome matters in its own right. It is unacceptable for a record that directly affects a taxpayer's right to a refund, commercial reputation and cash flow to be treated as an "internal act" and left outside judicial review. Whatever its name, every classification that alters the taxpayer's legal position can be challenged in court.

The Merits; Is There a Legal Basis for Classifying Taxpayers

On the merits, the administration relied on the sentence added to Article 36 of the VAT Law by Law No. 7524. Under that sentence, refund claims are in principle to be fulfilled according to the outcome of a tax audit report; the Ministry of Treasury and Finance is also authorised to determine different refund methods according to taxpayers' levels of tax compliance. According to the administration, monitoring adverse reports and findings is a constitutional and statutory obligation.

After referring to this amendment and the new version of the Communiqué in its reasoning, the Court reached a different conclusion. According to the decision, there is no statutory provision enabling either the defendant administration or its superior authorities to categorise taxpayers in this way; nor does the Constitution contain a provision permitting it. A classification without a legal basis disturbs tax peace and runs contrary to the fundamental rights and freedoms guaranteed by the Constitution.

The Court's starting point is Articles 48, 49 and 73 of the Constitution. Rights and obligations relating to tax can only be introduced by statute; the ability of private enterprise to operate in security and stability also depends on this guarantee.

What the Decision Suggests

In my view, the real value of the decision lies in making visible the difference between the power to determine the refund method and the power to label the taxpayer. The legislature gave the Ministry the power to determine the procedure by which refunds are made. That power does not by itself legitimise entering a taxpayer in a table of adverse findings without hearing its defence and solely on the basis of a "finding".

The core of the problem has not changed. The taxpayer usually learns of the listing when claiming a refund; it does not know what the listing rests on, or when and on what condition the record will be removed. A record made without a right of defence and without stated reasons has the effect of a sanction in practice. The certainty required by the principle of legality cannot be achieved by changing the heading of a communiqué section.

Combating unlawful refunds is of course a legitimate aim. Yet the legitimacy of the aim does not show that the means is lawful too. Risk analysis is the administration's internal work; once its result turns into an act restricting the taxpayer's rights, a statutory basis, reasoning and effective judicial review are required.

The decision is not final; an appeal to the Ankara Regional Administrative Court is available within thirty days of service. The debate can be expected to continue before the higher courts. Even so, this decision, rendered in the period after Law No. 7524, offers strong support for taxpayers in a similar position.

The name of the list may change; what does not change in a state governed by the rule of law is the taxpayer's right to know under which statute it has been placed on which list.

Source; decision of the Ankara 8th Tax Court dated 30.10.2026, E. 2026/248, K. 2026/1095.