COMPLIANCE MANAGEMENT Ugur DOGAN Audit and Compliance Department Turkish Revenue Administration PRESIDENCY OF REVENUE

Gelir İdaresi Başkanlığı SOURCES DATA WAREHOUSE DATA WAREHOUSE OPERATIONAL SOURCES (REVENUE ADMINISTRATION) OPERATIONAL SOURCES (REVENUE ADMINISTRATION) GOVERMENTAL ORGANISATIONS GOVERMENTAL ORGANISATIONS PRIVATE SECTOR ORGANISATIONS PRIVATE SECTOR ORGANISATIONS e-Declaration Registration information Collection Debt Ownership/Partnership Audit results Assessments and payments Customs Import information Export information Land registry offices Purchasing house Selling house Motor vehicles information Central Bank Post Office Banks Credit card sales Checking/investment accounts Credit transactions:mortgage, loan… Money transfer-payment transactions Currency purchasing/sales …. Factroring companies Insurance companies Leasing companies Porfolio management companies Gelir İdaresi Başkanlığı 2

CROSS-CHECK of CREDIT CARD SALES AND VAT DECLARATIONS Received credit card sales data from banks monthly Stored in the data warehouse Checked across the line 45 refering to credit card sales information on VAT return PRESIDENCY OF REVENUE

INTERNET TAX OFFICE Sales Information www. gelirler.gov.tr ANA SAYFA Sales Information Anasayfa Adı OSMAN Önceki Sayfa Soyadı ÇANAKKALE GÜVENLİ ÇIKIŞ Vergi Kimlik Numarası 1112223333 The Bank & Machine ID & Amount of sales Kimlik Bilgileri 21 Temmuz 2009 Pazartesi 11:55 Tahakkuk Tahsilat HAZİRAN/2008 AYI SATIŞ BİLGİLERİ Borç 414 Tecil Yurt Dışı Çıkış Yasağı Banka Adı Üye İşyeri No. Tutar Garanti Bankası 15456471564 55.250,00 Vakıflar Bankası 74468545648 15.482,00 Yapı Kredi Bankası 78445415415 36.214,00 İş Bankası 96565005651 34.154,00 TOPLAM 141.100,00 Gümrük Çıkış Bey. İşlenmeyen Ödemeler 4811 Vergi Barışı Pos Bilgileri Ekstre Dökümü YMM Söz.Bilgileri Credit card sales EFKS Fatura ID Bil. Belge Basımı ÖTV İşlemleri E-Tahsilat Haziran/2009 Dönemi gün sonu raporu alınmış toplam işlem tutarınız 141.100 TL’dir. Tutara itirazınız varsa bağlı bulunduğunuz vergi dairenize başvurunuz. Dilekçeler Görüş/Öneri Kullanıcı Şif.Değişt. Kişisel Şifre Değişt. Kişisel Bilgi Güncel. Warning!: “Your total credit card sales amount is 141.100 TL. Visit your tax office for your disapprovals” Vergi Türleri

Real-Time Automatic Cross-Check Mechanism Credit card sales information appears on the screen when a taxpayer fills out e-VAT return Credit cards sales information from banks Data Warehouse Tax Offices Automation System approves ignores The system automatically selects taxpayer as non-compliant and displays the list on the screen of tax officer

OUTCOME: DECREASING THE NUMBER OF NON-COMPLIANT TAXPAYERS DISCREPANCIES Number of Non-Compliant Taxpayer Months

THE VAT REFUND RISK MODEL PRESIDENCY OF REVENUE

DEVELOPING A VAT RISK MODEL Identifiying fraudulent traders Receiving required documents via the Internet for VAT refund process Generating VAT refund check report for tax offices PRESIDENCY OF REVENUE

SCORING and RANKING PROFILES FOR IDENTIFYING RISKY TAXPAYERS Data Rules Payment ANALYSIS PROCESS Late payment E-returns Frequency of changing address Balance sheet/Income statement Score High turnover Profile Registration Failure to file returns Ba-Bs Forms Round sum figures Audit results Debts Audit history Low Risk High Risk

ANALYSING THE LISTS WITH THE AUTOMATED VAT REFUND SYSTEM List of Suppliers List of Custom Declarations List of Export Invoices VAT Return Tax Office Claimant Application of Refund Claim VAT Refund Control Report CENTRAL DATABASE

BA – BS ANALYSIS WHAT IS FORM BA-FORM BS ? Taxpayers are obliged to submit Form Ba and Form Bs reporting their montly purchases and sales. Form Ba Purchases over 2.500 € (5.000 TL) from one taxpayer Form Bs Sales over 2.500 € (5.000 TL) to one taxpayer PRESIDENCY OF REVENUE

LARGE-SCALE CROSS-CHECK MECHANISM Purchase and sale amounts of taxpayers are cross checked based on TIN Inconsistencies are analyzed Bs Form Taxpayer A’s sales declaration to B, C, D, E Transaction Sale Amount (TL) Ba Form Taxpayer B, C, D and E’s purchases declarations from A Transaction Purchase Amount (TL) Sales to B 40.000 √ B’s purchases from A 40.120 Sales to C 79.860 C’s purchases from A 79.960 Sales to D ? D’s purchases from A 53.500 Sales to E 36.000 E’s purchases from A 124.000 After other controls, taxpayers A, D and E are selected for audit

Claimant’s Suppliers List A B C BA BB BC BBA BBB BBC ANALYSIS of SUPPLIERS and SUB-SUPPLIERS (NETWORK ANALYSIS FOR IDENTIFYING FALSE VAT REFUND CLAIMS) Claimant’s Suppliers List 1st phase analysis : Suppliers list submitted by the claimant (Claimants’ input VAT list) A B C 2nd phase analysis: Iteration of analysis for second phase suppliers(from B’s form Ba) BA BB BC BBA BBB BBC 3rd phase analysis: Reiteration of analysis for third phase suppliers(from BB’s form Ba) PRESIDENCY OF REVENUE

Turkish Revenue Administration THANK YOU… UGUR DOGAN Head of Department Turkish Revenue Administration udogan@gelirler.gov.tr PRESIDENCY OF REVENUE