The Nature of a Tax Assessment Decision and Its Appeal

Article 1 of the Tax Procedures Law defines a tax assessment as a decision issued by the authority concerning either the tax payable or the tax refundable. Such definition implies that a tax assessment is an administrative action carried out by the Federal Tax Authority, through which the taxable person shall pay a specific amount due to the state. The authority’s actions are based on tax laws and regulations. Through this process, a legal status is established, whereby the authority assumes the status of creditor in the tax obligation, while the taxable person is placed in the position of debtor for the same debt.

In this sense, a tax assessment is an administrative act that inherently contains all the elements of an administrative decision. It is issued by the Federal Tax Authority, a government entity entrusted by its founding law with the authority and jurisdiction to issue tax assessments. Through this authority, the element of jurisdiction is fulfilled. The tax assessment is presented in the form of a written notice that includes various details such as the date, reference number, name of the taxable person, tax registration number, type of tax, net amount and due date. With these details, the element of form is completed.

A legal effect is produced by the tax assessment, establishing a legal position for the taxable person by placing them in the position of a debtor to the government for the amount of tax due. Through this effect, the element of merits is realized. The issuance of a tax assessment by the administration (the Federal Tax Authority) only occurs when a person engages in business activities subject to taxation under tax laws. The performance of these activities serves as the factual circumstance prompting the authority to issue the tax assessment, thus fulfilling the element of cause. This objective is to achieve the public interest, which is to affirm the state’s right to claim the tax due. With this objective, the element of objective is established.

In summary, a tax assessment is considered an administrative decision that is issued by a competent administrative body, follows a specific form, has a merits and legal effect, is issued for a reason, and aims to achieve a particular objective. As a result of the classification of a tax assessment as an administrative decision, it is subjected to the legal provisions governing disputes in administrative annulment lawsuits, including the competent jurisdiction for reviewing the dispute and the deadline for filing an annulment lawsuit. Additionally, the requirement to present the dispute before the Mediation and Conciliation Centre before being heard by the court is imposed. According to these provisions, exclusive jurisdiction over disputes involving the federation is held by the federal judiciary, and the time limit for filing an annulment lawsuit against administrative decisions is set at 60 days from the date of publication of the contested decision, notification to the concerned party, or definitive knowledge of the decision. Furthermore, administrative disputes are not required to be presented before the Mediation and Conciliation Centre. However, an exception to these provisions has been introduced by the Tax Procedures Law, which requires tax disputes (which are considered administrative disputes) to undergo two phases: an administrative phase followed by a judicial phase.

The administrative phase is initiated by a request submitted by the taxable person to the Federal Tax Authority for reconsideration of the issued tax assessment decision. The deadline for reconsideration is set at 20 working days from the date of notification of the assessment decision. If the reconsideration request is not accepted by the taxable person, an objection may be filed before an administrative committee known as the Tax Disputes Resolution Committee. The deadline for filing an objection is set at 20 working days from the date of notification of the Federal Tax Authority’s decision on the reconsideration request.

According to Article 31(5) of the Tax Procedures Law, tax disputes are not admissible before the competent court unless an objection has first been filed with the committee. Once the dispute is presented before the competent court, which shall be a federal court, the judicial phase is initiated. The deadline for appealing the committee’s decision before the competent court is set at 20 working days from the date the appellant is notified of the decision. The dispute is then examined at the initial, appellate, and cassation stages in accordance with the rules and procedures applicable to administrative lawsuits.