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Turkey VAT guide

VAT compliance and reporting rules in Turkey

Below is a summary of the major rules provided under Turkish VAT rules (Katma Değer Vergisi Kanunu (VAT Act)). Check our country VAT guides for other jurisdictions.

Our VAT Calculator & VAT Filer products on a single platform, VAT Calc, are unique in that they come with all of this included out-of-the box for Turkey and scores of other countries around the world.

Turkey VAT country guide

Highlights Local term Katma değer vergisi (KDV). VAT
VAT Rates - standard 18%
VAT Rates - reduced 8%; 1%; 0%
VAT number format 1234567890
Registration threshold Nil
VAT Group Not permitted
VAT recovery foreign businesses Highly restricted. Eg Turkish conference attendance
Fiscal Representative N/a
Currency Lira, TRY
Administration Introduction Turkey introduced VAT in January 1985
VAT laws Katma Değer Vergisi Kanunu (VAT Act)
Tax Authorities Revenue Administration, part of the Ministry of Finance and Treasury
VAT Rates Standard rate 18%
Reduced rates 8%: food; medical supplies; cinemas and theatre; pharmaceuticals; certain construction supplies; textiles.  1%: basic foodstuffs; newspapers and journals; second-hand cars; agricultural products
Zero-rated Exemption with credit for previously paid VAT: Exports; international transport; oil extraction; animal feed; others
Exempt Financial services; leasing property by non-incorporated bodies; water supplies; scrap metal and unprocessed gold; gambling; medical supplies; welfare expenditure; education
Scope of VAT Scope of VAT Goods and services provided in Turkey; imports of goods and services
Time of supply Goods & Services (general rule) Earlier of supply or when consideration received. Goods: delivery or transfer of ownership. Services: provision. Advanced payment do not trigger a VAT tax point.
Reverse Charge General rule applies
Continuous  Services Earlier of payment, invoice or end of VAT period
Imports Clearance from customs or bonded warehouse into free circulation
Goods on approval and return General rule applies
Registration VAT registration threshold Nil
Voluntary VAT registration N/a. Certain small trader sectors (e.g. hairdressing, shoe repair) are exempt with special scheme
VAT number format 1234567890
VAT Group Not permitted. Multi site divisions may register as a single VAT payer.
Non-residents Do not register for taxable supplies, replying on the reverse charge or Partial Withholding VAT regimes (see separate). Exceptions: e-services to consumers; if local agent
Fiscal Representative N/a. Although local agent does trigger potential VAT registration obligation (see separate)
Digital Services Foreign providers must register for B2C sales of e-services. There is no VAT registration threshold. Simplified online registration process.
Pre VAT registration costs Only VAT registration costs may be included in first VAT return
VAT Invoices Issuance Invoices should be issued withing seven days to tax point. Retail till receipts may be used if below TRY 1,200
Content Date; date of supply if different from invoice date; unique sequential VAT invoice number; name, address and tax registration numbers of supplier and customer; full description of goods or supplies, including units or quantities and prices. VAT amount due.
E-invoices Turkey e-Faktura obligations
Simplified invoices Not permitted
Self-billing Not permitted
Retention of invoices Five years for tax rules; Ten years for accounting requirements. Paper invoice must be retained. Invoices may be stored outside of Turkey with assurances on ready access for Revenue
FX rules Amounts must be shown in TRY is also shown in a foreign currency
Invoice corrections Credit notes not permitted. Supplier and customer must agree adjustment and process through respective returns to secure a refund of VAT. Invoice may be cancelled, and new one issued is mistake/error, with acceptance signatures.
Compliance Right to deduct Excluded: passenger vehicles; otherwise per corporate income tax deductibility rules
Call-off stock VAT registration simplification for non-resident not permitted. Treat as import sale to Turkish customer.
Reverse Charge - B2B Applies range of import services and applied to VAT and non-VAT registered customers: IP and copyright; consultants; rental; non-banking interest; import commissions.
Cash discounts No special allowance (see invoice corrections separate)
Bad debt relief Only available once court ruling on recovery completed
Import VAT deferment Not provided for
VAT warehouse No VAT warehouses. Bonded customs warehouses available for holding goods for trading under duty and VAT suspension prior to import
Supply & install No specific rules. General rule applies
Use and enjoyment services No specific rules beyond general rule - if supplied or unutilised in Turkey than VAT liability.
Capital goods adjustment period May reclaim in VAT return period of purchase
Non-residents VAT recovery Only the following may be reclaimed: attendance at Turkish business conferences etc; international transport expenses
VAT on Digital Services Turkey VAT on digital services to consumers
Live events Non-resident will generally not VAT register if providing services for less than six month
Distance selling threshold for goods
Cash accounting scheme N/a
VAT registered cash tills N/a
Statute of limitations Ten years under commerce rules
Other Partial Withholding VAT: Turkey requires business customers in certain sectors to split  % of VAT, and pay directly to the Revenue. Sectors: catering; constructions; cleaning; certain metals; supply of labour; capital equipment servicing and maintenance
VAT Returns Frequency Monthly. Quarterly for small businesses on margin VAT scheme and passenger / cargo transport
Filing method Electronic, e-bey- anname
Deadlines (inc payments) 26th of the month following the reporting month end
VAT credits Surplus input VAT incurred must be rolled over to future VAT returns
Corrections Corrective return with  explanation for adjustment
Non-residents Should only register for B2C digital services (see separate) unless local agent/representative - in which case as per resident obligations
Other filings VAT sales and purchase invoice listing (“Bildirim Alış-Bildirim Satış” or  BA-BS) with transaction threshold of TRY 5,000
SAF-T N/a
Penalties & interest For missed VAT return, TRY 2,500. Late payment interest of 1.6% per month. Variable fines for undeclared VAT.
B2C Distance Selling returns Only B2C digital services. Quarterly returns (VAT Return 3), due 26th month after reporting period. Withholding VAT does not apply.

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