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The decision of the Council of State Tax Chambers General Assembly, numbered E:2025/21 and K:2026/1, was published in the Official Gazette dated April 8, 2026 and numbered 33218. Our review and evaluations regarding the decision are presented below for your information.
Subject of the Decision
The case concerns a vehicle purchased in the name of the deceased by benefiting from the disability exemption under Article 7/2(a) of the Special Consumption Tax Law No. 4760 ("SCT Law"). After the invoice for the sale price was issued, the tax return was filed, and the payment was made, but before the registration process was completed, the deceased passed away on the day of registration. Consequently, the taxes that had been exempted at the time of purchase were assessed ex officio against the heirs.
In the concrete case, the vehicle invoice had been issued and the sales transaction had been completed; however, the deceased passed away before the vehicle was registered in their name.
The tax administration argued that the conditions required for the exemption were not fulfilled and therefore made an ex officio tax assessment against the heirs for the SCT and other taxes that were not paid at the stage of first acquisition. In the judicial process initiated by the heirs, different courts made the following evaluations:
In the case heard before the 4th Tax Chamber of the Istanbul Regional Administrative Court, the Istanbul 9th Tax Court ruled that:
- the transaction had been economically completed during the lifetime of the deceased,
- the taxable event had actually occurred before the death,
- there was no legal regulation imposing tax liability after the death of the right holder before registration,
- explanations in the relevant communiqué could not be taken as a basis for judgment,
and therefore decided to annul the penalized tax assessment.
However, the Regional Administrative Court interpreted the matter under Articles 7 and 8 of the Turkish Civil Code and concluded that since the deceased was not alive on the registration date, registration could not produce legal consequences. Therefore, it ruled that the exemption could not be applied as of the registration date but removed the tax penalty on the grounds that penalties arise from the taxpayer's failure to fulfill obligations.
In another case concerning a different heir of the same deceased, the Istanbul 2nd Tax Court ruled that:
- there was no claim that the taxable event did not occur at the time of first acquisition,
- registration is declaratory rather than constitutive,
- the true nature of the taxable event should prevail,
- therefore, the taxable event occurred before the death,
and decided to annul the penalized tax assessment.
The 8th Tax Chamber of the Istanbul Regional Administrative Court, reviewing the case on appeal, found the decision of the local Tax Court to be lawful.
Decision
The Council of State Tax Chambers General Assembly evaluated the dispute between regional administrative courts based on when the "taxable event" occurs for SCT purposes. The Assembly clearly stated that for vehicles subject to registration, the first acquisition—and thus the taxable event—is, as a rule, completed upon registration, and that the exemption must be assessed within this framework.
Accordingly, it was concluded that all statutory conditions must be fulfilled together in order to benefit from the disability exemption. If the deceased passes away before the completion of the registration process, the vehicle cannot be considered as first acquired by the disabled person, and therefore the conditions for exemption are not met. Consequently, a consensus was reached that the ex officio tax assessment against the heirs for the unpaid taxes due to the exemption is lawful.
In the dissenting opinion, it was stated that if the person in whose name the vehicle is registered is not alive at the time of registration, the registration cannot produce legal consequences. It was also noted that the registration date should be taken as the basis for tax liability, and therefore, since the exemption cannot be applied, the tax assessment is not unlawful.
Evaluation and Conclusion
The decision positions the registration process as the determining factor in the application of SCT exemption for disabled vehicle purchases and ties tax consequences to a formal stage. This approach has significant implications, especially in cases frequently encountered in practice where "the invoice has been issued but registration has not yet been completed."
In this context, pursuant to the amendment made by the Communiqué on the Amendment of the General Communiqué on the Implementation of Special Consumption Tax (List II), it is important that the registration process is completed in vehicle purchases made under the disability exemption. It is accepted that in cases such as death occurring before registration, the exemption cannot be applied and the tax liability may be imposed on the heirs.
However, when the material facts are examined, if it is accepted that the substantive nature of the transaction giving rise to the taxable event was completed before death, it is clear that the tax arose with the sale transaction and the relevant obligation was fulfilled. On the other hand, there is no legal provision stating that the heirs would be liable for SCT if the taxpayer dies before registration. In accordance with the hierarchy of norms and the principle of legality of taxation under Article 73 of the Constitution, it is our opinion that issuing a penalized tax assessment based on secondary legislation such as a communiqué is not legally sound.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
