Purpose of the Uniform Chart of Accounts
The Uniform Chart of Accounts (UCA) in Turkey has been in force since 1994 to standardize accounting records nationwide. With this regulation, the Turkish Revenue Administration (TRA) aims to:
- Ensure comparability of financial statements,
- Enhance transparency in tax audits,
- Provide reliable information to the public and investors.
Compliance with the UCA is one of the fundamental requirements of keeping books in accordance with the Tax Procedure Law (TPL).
Compliance Requirements
Businesses operating in Turkey must follow several obligations regarding the UCA:
- Correct account classification: Income, expenses, assets, and liabilities must be recorded in the designated account codes.
- Timely recording of documents: According to TPL Art. 219, documents must be entered into the books within 10 days.
- Year-end procedures: Closing and transfer entries must be made in line with the UCA.
- Preparation of financial statements: Balance sheets and income statements must be drawn up in accordance with UCA account groups.
- Use of electronic systems: e-Ledger, e-Invoice, e-Archive, and similar digital applications must also comply with the UCA.
Penalties for Non-Compliance
Failure to comply with the Uniform Chart of Accounts is sanctioned by the TRA under the provisions of the Tax Procedure Law:
- General Irregularity Fines
- Improper bookkeeping,
- Misclassification of accounts,
- Failure to record documents. In such cases, irregularity fines are imposed under TPL Art. 352.
- Special Irregularity Fines
- Failure to issue documents or issuing false documents,
- Non-compliance of ledgers with e-Ledger format. High monetary penalties are applied under TPL Art. 353.
- Tax Loss Penalties
- If non-compliance with the UCA leads to underreported corporate or income tax bases, A tax loss penalty (100%) is imposed.
- Severe Sanctions
- In cases of forged or misleading documents, Imprisonment penalties under TPL Art. 359 may apply.
Importance for Businesses in Turkey
Compliance with the UCA:
- Minimizes risks in audits,
- Provides assurance during tax inspections,
- Improves the quality of corporate financial reporting.
Non-compliance, however, may lead to both financial penalties and reputational damage.
Advantages of Professional Support
Since tax and accounting regulations in Turkey change frequently, it is highly recommended that businesses work with professional tax advisors or certified public accountants. This ensures full compliance with TRA requirements and minimizes penalty risks.
ÖzbekCPA provides professional consulting services for UCA compliance and tax law requirements in Turkey.
