Large Taxpayers Office has notified that our Company is required to pay an additional Special Communication Tax (SCT) over the prepaid card sales through the distributors in its Tax Investigation Report for the period 2008-2012. Accordingly, Turkcell has received a tax imposition of TRY211.1 million in principal and a tax penalty of TRY316.6 million, totaling TRY527.7 million.
In line with the relevant legislation and sector practice, our Company already pays SCT calculated over all communication service revenue (including the gross revenue recorded through prepaid card / TRY sales).
As per the related legislation, the final retail price of prepaid minutes (TRY or unit) of our distributors is not determined by our Company. In other words, distributors determine the retail price of prepaid minutes (TRY or unit) taking into consideration the market conditions, supply and demand equilibrium, competition and similar dynamics, independent of our Company’s control.
However, it is our understanding that on the basis of ambiguity in tax legislation, our Company is regarded as a tax-payer over the ultimate retail price, on which we have no control for the reasons explained above, through the sales channel.
Pursuant to the related legislation, Turkcell will seek its legal rights regarding this tax imposition of principal and penalty.