In today’s commercial landscape, the majority of companies lease vehicles through long-term rental agreements to support their business operations. This practice has been prevalent for many years, leading to the establishment of numerous private companies specializing exclusively in vehicle leasing. These agreements, typically valid for one year or longer, are standardized contracts prepared by leasing companies. However, due to the unique circumstances of each case, these standard agreements may sometimes prove insufficient, resulting in disputes that ultimately lead to litigation.
One of the most common disputes in long-term vehicle leasing contracts arises from traffic accidents involving rented vehicles and the resulting financial liabilities. In addition to this ongoing issue, a new potential point of contention is expected to emerge in the near future: the National Vehicle Identification System (UTTS), which was published in the Official Gazette on October 5, 2023.
The National Vehicle Identification System (UTTS) is a regulatory system designed to promote fair competition in the fuel market and combat the informal economy by automatically recording fuel expenses associated with vehicles at the time of purchase. As part of the UTTS implementation, applications were finalized by January 31, 2025, and the installation of Vehicle Identification Units (TTB) must be completed by April 30, 2025. Commercial enterprises wishing to record fuel expenses as deductible business costs and benefit from related tax deductions must complete their applications before January 31, 2025, and ensure that installation is completed by April 30, 2025.
For businesses that frequently utilize vehicles, the ability to register fuel costs as expenses is of great financial importance. Companies already enforce strict policies regarding vehicle usage, closely monitoring which employees use which vehicles and ensuring that all fuel expenses are properly documented as business expenditures. With the introduction of UTTS, fuel transaction details—including the amount purchased and the specific vehicle receiving the fuel—will be automatically recorded, thereby preventing potential tax losses.
As mentioned earlier, long-term vehicle leasing is a widely adopted method for companies to expand their fleets. Many existing lease agreements were signed before the implementation of UTTS regulations, based on mutual consent between the parties over the years. Naturally, these agreements do not contain any provisions related to UTTS. The Vehicle Identification Unit (TTB), which must be installed in vehicles by their owners to enable automatic recording of fuel purchases, is affixed for a certain fee and cannot be reused once removed. Under the new legal framework, it is clear that companies wishing to claim fuel costs as deductible expenses must ensure the installation of a Vehicle Identification Unit (TTB) in their vehicles. While UTTS does not restrict fuel purchases, fuel receipts will no longer be acceptable for expense reporting, effectively making participation in the system mandatory for businesses.
However, uncertainty remains regarding which party bears the financial responsibility for the UTTS registration and installation costs in the context of long-term rental vehicles. Since long-term vehicle rental contracts are standardized agreements that predate UTTS regulations, rental companies are reluctant to assume these costs. This situation is causing numerous disputes in practice, with businesses seeking to claim fuel expenses facing additional financial burdens.
Legal Perspective
From a legal standpoint, there appears to be no legitimate basis for rental companies to refuse responsibility for Vehicle Identification Unit (TTB) costs. Even if existing lease agreements do not contain specific provisions regarding UTTS, the General Communiqué No. 32330, which introduced UTTS, does not provide an exemption for long-term leasing companies. Accordingly, the law requires vehicle owners to install the Vehicle Identification Unit (TTB) in their vehicles. Since leased vehicles are legally owned by rental companies, and unless explicitly stated otherwise in the rental agreement, there should be no dispute over the responsibility for these costs.
Conclusion
The costs associated with the installation of the Vehicle Identification Unit (TTB) have become a point of contention between leasing companies and lessees. While legal regulations indicate that these costs should be borne by the vehicle owners—i.e., the leasing companies—some rental firms refuse to comply, placing the financial burden on companies that wish to claim fuel expenses.
To prevent future disputes, it is essential that all new long-term vehicle rental contracts explicitly specify which party will bear these costs. For existing contracts, the best course of action is for the parties to draft supplementary protocols clarifying their respective obligations. This will help mitigate potential conflicts and ensure a clear allocation of responsibilities moving forward.
Hayri Küçüksarı
Attorney At Law