Turkey intensifies IBAN transfer audits to combat unregistered economy

The Turkish Ministry of Treasury and Finance and the Financial Crimes Investigation Board (MASAK) have intensified audits of IBAN-based money transfers to combat the unregistered economy. Authorities are using automated systems to cross-reference transfer descriptions with tax declarations.

Key areas of scrutiny include:

• Rental Payments: Regular transfers labeled as “rent” are automatically compared against property owners' tax filings. Discrepancies can lead to investigations and tax penalties.

• Commercial Transactions: Using terms like “debt repayment” or “trust money” to mask commercial income without official invoices or contracts may result in being classified as an unregistered sale, triggering tax fines.

• Legal Risks of Empty Descriptions: According to Court of Cassation precedents, leaving the description field blank or using only punctuation can lead a court to interpret the transfer as the “repayment of an existing debt.” This makes it difficult for senders to legally reclaim funds if the transaction was intended as a loan or gift.

Additionally, businesses directing customers to use personal IBANs for commercial purchases face penalties for non-compliance with regulations.