m-POS Era In Turkey: Tax Procedure Law General Communiqué No. 507 (On Safe Mobile Payment And Electronic Document Management System)
Revenue Administration have published the Tax Procedure Law General Communique No. 507 (on Safe Mobile Payment and Electronic Document Management System) ("Communique") on the official gazette of 01 June 2019.
The Communique is critical for the payment ecosystem as it opens doors for mobile app-based payment devices (e.g. m-Pos applications) to be used at face-to-face transactions. m-POS market couldn't take off in Turkey before due to the regulatory boundaries which are being lifted with the Communique. The use of electronic payment methods in brick-and-mortar retailers should be expected to expand with the Communique. In other words, mobile payment application market will soon to become quite active in Turkey.
The Communique establishes and defines a new type of system called "Safe Mobile Payment and Electronic Document Management System" (the "System"). "The System" refers to the payment processing mechanisms to be established by financial institutions or payment recording device manufacturers and permitted by the Ministry of Treasury and Finance. According to the Communique, the systems can become online after 01 September 2019.
Certain key definitions provided in the Communique are as follows:
Under the current Turkish Law, to process card payments during transactions taking place in the physical mediums (i.e. physical shops, when seller and customer are face-to-face), the sellers are required to use a 'payment recording devices' ("PRD") (e.g. physical mobile POS devices, cash registers with PRD functionality). PRDs can directly upload transaction data to the Revenue Administration's systems and such devices can only be manufactured by authorized manufacturers (i.e. payment recording device manufacturers) in accordance with very strict technical requirements.
However, the Communique allows the use of other electronic and technological solutions by the sellers to process payments during physical transactions, by introducing the concept of Payment Accepting Device. Accordingly, the sellers are not necessarily required to use a physical POS device to process physical or virtual cards. Other hardware solutions (tablets, smartphones, NFC supported devices etc.) or software applications (apps, QR code readers etc.) will be possible to be used to process payments.
In order to offer payment solutions via a Payment Accepting Device in accordance with the Communique, following criteria must be fulfilled:
1. Private integrators are licensed entities (by the Revenue Administration) that provide outsourcing services as to issuing of electronic invoices. Private integrators provide information system infrastructure support to taxpayers whose systems are not capable of integrating with systems of Revenue Administration when issuing e-invoices. You may find the list of private integrators that are licensed by the Revenue Administration here.