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.
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Turkey VAT country guide
| Highlights | Local term | Katma değer vergisi (KDV). VAT |
| VAT Rates - standard | 20% | |
| VAT Rates - reduced | 10%; 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 | 20% since 10 July 2023 |
| Reduced rates | 10%: 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. |
