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Turkey withholding VAT threshold raised to TRY2,000

Turkey has increased its withholding VAT threshold from TRY1,000 to TRY2,000 per invoice. This came into effect from 3 June 2021 when the change was ‘gazetted’.

The regime applies on payments for supplies of goods or services payable to non-residents. Like regular income withholding taxes, it is designed to reduce the likelihood of fraud. It is based on the authority of the Turkish administration to make the customer liable to VAT due. The withheld VAT should be remitted directly to the Turkish tax authorities.

Withholding VAT is commonly used across South America, particularly on B2C transactions via payment providers. In Europe, it has been adopted to a limited extent in Poland, Italy and Austria. The UK is looking at imposing it after 2025.

Calculate or verify Turkish VAT or other countries indirect taxes including GST calculations on individual or batch transactions with our Advisor and Auditor services.

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