Tax Clearance Certification: Directive No. 147/2011

This directive amends the previous directive 139/2010.

It defines a tax clearance certificate as a written document that verifies a taxpayer has paid or is paying his tax. This certificate is given by the tax authority upon application of the taxpayer.

Conditions for application

There are four conditions for the application for tax clearance certification. These are: (a) a written application to the tax authority, (b) payment of arrears or current tax duty, (c) agreement or contract of payment of duty and starting to pay accordingly, and (d) a document that shows the taxpayer has submitted a complaint and that it is being reviewed by the department or by the appointed body.

There are also other requirements that must be fulfilled in order to obtain tax clearance certification even though the above requirements are fulfilled. It provides an exhaustive list as the previous directive with additional requirements for assessment of the risk of non-payment of the tax and the urgency of the payment will be considered before the issuance of the tax clearance certificate.

Despite these conditions, due to economic or social reasons, the Ministry or the tax authority may issue certification of tax clearance in special cases.


There are two kinds of audit specified in the directive; general audit and service audit (In the previous directive, it has been called operational audit and desk audit respectively). The general audit is made by auditing the unpaid tax duty from the balance sheet and other relevant documents through a deep and detailed inspection method. The service audit, on the other hand, is done simply by cross-checking documents available in the authority or in some cases in the hand of a third party.

The directive classifies the services as services that have to be audited before the issuance of the tax clearance and those services which do not require to be audited. It can be considered as an additional requirement.

The services that do not require audit are; renewal of business or professional license, to participate in an auction, for annual vehicle registration and inspection, to get a bank loan, for insurance and to change car license plate, to change business name or address, to reduce business field and for merger of business organizations. For bank loans, payment of all tax duties or security for payment must be provided. 

For those services in which the sale or transfer of the capital of a business organization for less than 50% involves, a service audit is required to be made. Also, if the taxpayer is a low or medium taxpayer and the level of risk is medium or low, a service audit will be made (a) for the sale of the capital of more than 50%, (b) for half or full closure of a business, and (c) to change or reduce ones’ business field. If the level of risk is high, the law requires a general audit to be made.

Despite the level of the risk, for the sale or transfer of more than 50% of capital in form of sale, donation, succession, or business closure; a general audit shall be made.

Liquidation of tax duty

The liquidation shall be made for cases:-on the transfer of the capital of the business; the contract of a merger of two or more business organizations showing for payment of tax duty of the merged organization; on payment for cost-sharing by higher education institute students; on the income tax. For those services that do not have an assessment of the level of risk, the assessment shall be made accordingly.

Expiry of the certificate

For participation in auctions or to get bank loans, the certificate will be valuable until 6 months from its issuance, for renewal of business licensing or vehicle inspection, it works for the budget year of the company or the country. For a change in name of the business or changing business plan, it is valid for 3 months. For cost-sharing by higher education institute students, it works only for getting the educational documents.

Time for issuance of the certificate

The ministry is expected to issue the tax clearance certification within 14 days. In case of failure, it shall give a written document stating the reason. If there has to be an audit, it shall inform the person by a written document stating that the audit will be completed within 90 days. If there is any complaint, a person can file a complaint at the branch tax office.

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