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Turkey raises VAT split payments

Withholding VAT % raised across number of sectors

Turkey has raised the rates and list of supplies subject to a VAT split payment or withholding payment. This obligation requires the buyer to pay a percentage of the settlement directly to the tax authorities rather than to the supplier. It aims to reduce VAT fraud in certain sectors vulnerable to fraud.

The additional supplies, and applicable split payment, now includes are:

  • 30% on advertising services
  • 90% on cleaning services
  • 70% on machinery repairs
  • 70% on printing services
  • 70% on textile work
  • 40% on construction works, including architectural services

The requirement to apply split payments only applies to certain customer categories – mostly construction works. Turkey is now including mobile phone operators, insurers and trade unions.

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