VAT, known locally as Katma Deger Vergisi (KDV), was introduced into Turkey in 1985. It is similar to the European Union’s VAT system, requiring re-calculation and payments to the tax authorities at each transaction point in the onward sales chain.
Requirement to register for Turkish VAT
For foreign companies making taxable supplies in Turkey, there may be a statutory obligation to register for VAT. Once registered, non-resident traders must comply with local filing rules (see below).
Typical situations requiring a Turkish VAT registration include:
- Where goods are delivered within Turkey;
- Where goods are imported into Turkey;
- Export of goods from Turkey;
- Supply of services where the place of supply is Turkey.
Turkey VAT registration threshold
There is no threshold for registration in Turkey. It is compulsory to register in Turkey if taxable supplies are made.
Turkey permanent establishment
In Turkey it is necessary for non-resident traders to form a permanent establishment in order to register for VAT. This can be in the form of either: a joint stock company; a limited liability company; or a branch. There are various requirements and obligations to set up a permanent establishment in Turkey, depending on the type of establishment. However since the "Foreign Direct Investment Act No:4875" entered into force as of June 2003, it is no longer necessary for foreign companies to gain any additional approvals or authorisation to set up a permanent establishment in Turkey that are not also applicable to resident traders.
Latest Turkish news
Dec 27, 2018
Turkey has raised the Value Added Tax rate on electronic books and online journals from the 1% and 8% reduced rates, respectively, to the standard rate of 18%. The change is contained within Presidential Decree 475.
March 8, 2018
Turkey has proposed a range of changes to its VAT law, including: VAT credits will be paid within 12 months or 3 months if...
February 7, 2018
Turkey has provided an update on the VAT rules for non-resident providers of digital services to local consumers. VAT was imposed on such transactions...