Finance Ministry warns bodies and institutions: Strict measures to collect taxes and pursue tax evasion

The Ministry of Finance issued a statement calling on bodies and institutions that do not fall under the provisions of Paragraph 5 of Article 16 of the Value Added Tax Law to fully comply with their legal obligations whenever they engage in any economic activity.

The ministry stressed that any negligence or violation will be met with measures to collect undeclared taxes and fees, in addition to the resulting fines, affirming that it will pursue anyone proven to be involved in tax evasion in accordance with legal procedures.

The statement explained that Paragraph 5 of Article 16 of Law No. 379/2001 exempts certain bodies and associations of a humanitarian and social nature from value added tax, provided that their activities fall within the specified objectives, while excluding recurring activities that could create unfair competition with tax-liable institutions.

It noted that some bodies that do not fall within this category engage in a range of economic activities, whether social, cultural, scientific, sports, professional, or religious, which makes them subject to tax provisions.

The ministry also recalled that Article 3 of the law requires every natural or legal person independently engaged in an economic activity to register for value added tax once turnover exceeds the legal threshold, whether through supply operations or the provision of services that are taxable or exempt with the right to deduct.

The ministry called on non-compliant taxpayers, particularly those operating "off the books" and not covered by the exceptions, to take the initiative to register within two months of meeting the conditions for liability. It also asked those who carried out import or export operations after 7/11/2017 to promptly regularize their tax status regardless of the size of their business.

The Ministry of Finance confirmed that it will begin audits and enforcement measures to collect the taxes due, considering that any violation in this context constitutes the offense of tax evasion and exposes the perpetrator to legal accountability.