WOOD Flash – Logo Yazilim: new GIB regulations to expand e-fiscal solutions market

According to a draft communique (/taslaklar), posted on the GIB (Turkey’s tax revenue administration) website, the annual revenue metrics used by the Ministry of Finance to designate Turkish companies as compulsory e-fiscal service users (i.e., e-invoice, e-archive, e-ledger applications) will be lowered from 2022E-onwards and again in early-2023E. Moreover, subject to certain criteria, the new regulations will pave the way for the inclusion of thousands of businesses engaged in e-commerce, real estate and car dealership in the e-invoice system, expanding the user base for the e-fiscal solutions market. Although, considering its previous track record (and given the medium-term digital transformation roadmap of the Ministry of Finance), GIB was expected to revise its regulatory thresholds for the e-fiscal solutions market every few years, the scope and timing of the next changes were not known until now. While some of the new e-fiscal regulations will come into effect in early-2022E (and some others in the middle of the year), this is clearly positive for Logo (Turkey’s leading enterprise software developer, which is also among the top integrators the in e-fiscal space), as the new regulations will oblige hundreds of thousands of new companies (mainly SMEs) to switch to the compulsory usage of e-fiscal services (i.e., becoming customers of e-invoice integrators, such as Logo) and boost the overall transaction volumes in terms of different e-fiscal solutions (e-invoice, e-archive, e-dispatch documents). We note that, historically, e-fiscal integration services have been one of the fastest-growing revenue sub-segments of Logo, and we expect the new rules to expand the addressable e-fiscal solutions market further (in terms of both new customers and e-coin usage volumes) and result in accelerated revenue growth in this segment for Logo (as witnessed following the earlier regulatory changes introduced by GIB in late-2019).