Turkey’s Finance Ministry eyes luxury car owners for tax evasion
The tax inspection board of the Turkish Treasury and Finance Ministry has begun investigating luxury car owners to detect tax invasion and found that 780 vehicles were registered under individuals who have not declared taxes and had no registered source of income.
Duvar English
The Turkish Treasury and Finance Ministry's Tax Inspection Board (VDK) started scrutinizing taxpayers who did not declare taxes in line with their expenditures. Tax inspectors began investigating luxury car owners' income sources to determine if these incomes were declared.
The investigation focused on 7,885 luxury vehicles, revealing that many owners had no declared income or company partnerships, or their companies did not distribute profits. The luxury cars included 2022, 2023, and 2024 models of Porsche, Bentley, Ferrari, Lotus, Maserati, Mercedes, and BMW.
According to information obtained by AA from the Ministry, the primary targets were individuals who acquired luxury cars with unreported income. The investigation found that approximately 3,000 cars were registered to individuals, of whom 2,000 had partnerships in 7,000 companies, but only 300 companies distributed profits in 2022 and 2023. Furthermore, 780 cars were registered to individuals with no taxpayer status and no income sources.
Only 150 luxury car owners were found to have declared income, with 100 of them reporting profits under one million lira (30,000 dollars). The investigation prioritized those without taxpayer status, company partnerships, or other declared income. Subsequently, the focus shifted to those with company partnerships but no profit distribution or other income declarations.
As part of the investigation, 500 car owners were referred for tax audits to determine if their situations were related to unreported earnings. VDK encountered notable examples during the review.
In one instance, company owners bought Mercedes vehicles worth 23 million liras (696,500 dollars) in 2023, despite their companies only reporting modest profits and not distributing them. The payments were traced to company bank accounts but were not recorded in the accounts.
In another case, individuals with no declared income or company partnerships purchased Bentley vehicles for 27 million liras (817,600 dollars) in 2023. Tax inspectors aimed to identify the income sources for these luxury cars and ensure the income was taxed. A money laundering investigation would be conducted if no legal source was found.
The move comes as part of the tax increases the government introduced to combat the budget deficit, expected to be 6.4 percent of the gross domestic product (GDP). The draft law passed the parliamentary commission on July 28, with increases expected to come into effect on January 1, 2025.