What Is a Tax Audit and a Tax Audit Initiation Form?

 

What Does a Tax Audit Mean?

 

A tax audit is an official examination conducted to verify whether the taxes declared by taxpayers are accurate and compliant with the law. During this process, accounting books, financial records, tax returns, and supporting documents are reviewed together. The purpose is to determine whether there is consistency between the declared information and the actual situation.

Tax audits are not carried out solely to detect tax loss or irregularities. They also aim to ensure the proper functioning of the tax system, maintain fairness among taxpayers, and reduce unregistered economic activities. For this reason, a tax audit is a standard control mechanism that any business may encounter.

 

What Is a Tax Audit Initiation Form?

 

A tax audit initiation form (also known as a tax audit notification form) is the official document informing a taxpayer that a tax audit has commenced. It is prepared by the authorized audit authority and formally served to the taxpayer.

This document clearly defines the scope and boundaries of the audit. It specifies which types of taxes, which fiscal periods, and which procedures will be subject to examination. In this way, the process becomes more transparent and predictable.

 

What Information Is Included in the Audit Initiation Form?

 

In practice, the form generally includes the following details:

• Information about the auditing authority and the assigned tax inspector
• The type of audit and its legal basis
• The types of taxes subject to review
• The fiscal periods covered by the audit

These elements establish the framework of the examination process.

 

The Importance of the Tax Audit Initiation Form

 

This document prevents the audit from being arbitrarily expanded by clearly defining its limits. From the taxpayer’s perspective, knowing the scope of the audit makes preparation easier and helps prevent potential loss of rights.

For businesses that maintain organized accounting records, the audit process can be managed more effectively. Keeping income, expense, and invoice records systematically allows requested documents to be submitted promptly and facilitates the review process.

 

How Are Tax Audits Conducted?

 

Tax audits may be carried out in different ways. They can take place:

• At the taxpayer’s business premises
• At the tax office
• Through electronic systems

With the increasing use of digital documentation in recent years, electronic records have gained greater importance in audits. This development reduces the need for physical document submission while making record consistency even more critical.

 

Which Taxpayers May Be Subject to a Tax Audit?

 

Tax audits are not limited to a specific category of taxpayers. Any individual or entity with tax liability may be audited if deemed necessary.

The primary groups that may be subject to audit include:

• Sole proprietorships
• Capital companies (limited liability and joint-stock companies)
• Self-employed professionals

Being audited does not automatically indicate wrongdoing. In many cases, audits are part of routine oversight procedures.

 

How Are Taxpayers Selected for Audit?

 

Tax authorities determine which taxpayers will be audited based on various criteria. Risk analyses, sectoral comparisons, inconsistencies between declarations, and whistleblower reports may all play a role in the selection process.

The objective is to use audit resources efficiently and focus on areas considered higher risk.

 

What Are the Rights of Taxpayers During a Tax Audit?

 

The audit process does not rely solely on the authority of the tax administration. Taxpayers also have certain fundamental rights, including:

• The right to receive information about the scope and periods covered by the audit
• The right to request reasonable time to provide requested documents
• The right to present explanations and defenses regarding the findings

Additionally, taxpayers have the right to object to the audit report through the legal remedies provided under applicable legislation.

 

Which Tax Periods Can Be Audited? (As of 2026)

 

Tax audits must be conducted within the statute of limitations period. In general practice, audits may cover up to five years retrospectively. This means that accounting books and documents from previous years may be requested.

The applicable time limitation is regulated under Article 114 of the Turkish Tax Procedure Law (Law No. 213). Therefore, businesses must retain their accounting records and documents for the legally required retention period.

 

How Long Does a Tax Audit Take?

 

The duration of a tax audit varies depending on its scope, type, and complexity. Comprehensive audits covering all tax obligations may take longer, while limited audits focused on specific issues may be completed more quickly.

The speed and organization with which documents are submitted significantly affect the duration and smooth progress of the process.

 

Types of Tax Audits

 

In practice, tax audits are generally categorized into two main types:

Full Tax Audit:
All tax types related to a specific period are examined together.

Limited Tax Audit:
The audit focuses on a specific tax type or particular transaction group.

The scope of the examination depends on the type of audit initiated.

 

What Is a Tax Audit Report?

 

Once the audit is completed, an official tax audit report is prepared. This report details the findings, any assessed tax differences, and applicable penalties.

Following the official notification of the report, legal procedures begin, and the taxpayer’s rights to objection or settlement become applicable.

 

How to Check the Status of a Tax Audit Report

 

After the audit is finalized, certain information regarding the report can be tracked through official government systems. Through Turkey’s e-Government portal, taxpayers may access services provided by the Revenue Administration to review various tax-related matters.

The specific screens and procedures used for inquiry may vary depending on the stage of the report and the taxpayer’s situation.

 

What Penalties May Result from a Tax Audit?

 

If tax loss or irregularities are identified during the audit, various penalties may be imposed in accordance with applicable legislation. These may include:

• Tax loss penalty
• Irregularity penalty
• Late payment interest

The amount of the penalty depends on the nature and severity of the violation.

 

Why Are Tax Audits Conducted?

 

Tax audits are carried out to prevent tax loss and evasion, ensure the accuracy of declarations, and maintain the fairness and proper functioning of the tax system.

Therefore, maintaining organized records and complying with legal requirements are among the most important factors in reducing audit risk and ensuring a smoother audit process.