Value added tax in Turkey

What does VAT include in Turkey?

It includes all industrial and commercial activities, goods and free businesses, imported goods and services related to other activities, this tax is imposed at specific rates ranging from (1-18%).

  • On seeds, grains, vegetables, services, means of transport, funerals, and newspapers at a rate of 1%.
  • On foodstuffs, threads, bags, shoes, some agricultural machines, medical tools, fibers and animals at a rate of 8%.
  • Communication services and some other services by 18%.

Are there activities that are exempt from VAT?

There are several tax-exempt activities as follows:

  • Activities related to oil exploration.
  • Transit freight services.
  • Services provided to ships and aircraft at ports and airports.
  • Services and goods intended for export.
  • Roaming services within Turkish territory, for non-residents and those coming from abroad, on condition of reciprocity by the resident country in accordance with international agreements.
  • Transit transport.
  • The supply of equipment and machinery that takes place in the form of an investment certificate.
  • Manufacturers in Free Zones.
  • Insurance transactions and expenses.
  • The delivery of goods and services by diplomats and representatives of foreign consulates, on the condition of reciprocity for Turkish diplomats in the other country.
  • International organizations and their employees in Turkey.

Exemption from value-added tax when purchasing real estate:

The value-added tax constitutes a large expense for foreign investors, and for the steps taken by the Turkish government to make investment in Turkey desirable by foreigners, it has provided a concession to exempt foreign investors from paying value-added tax when they invest in real estate in Turkey, and it may be canceled. This franchise at a later time.

Who is eligible for VAT exemption?

  • Non-resident foreigners on Turkish territory.
  • Companies and organizations that have not achieved profits, and do not have offices or commercial operations in Turkey.
  • Turks residing outside Turkey for more than six months, in the event that they possess a work and residence permit.

What are the conditions for obtaining an exemption?

  • Paying the purchase value in foreign currency.
  • Not to sell real estate for a year, and if the sale is made within less than a year, the seller must pay the exempt value added tax.
  • New real estate purchased through a contracting company.
  • It only includes housing, offices and workplaces. As for agricultural lands, it is not included in the exemption.

What are the types of VAT?

The type of tax depends on the type, size and the purchased property, and we distinguish three types of taxes:

If the residential property has an area of ​​less than 150 square meters, the value-added tax rate will be 1%.

If the residential property has an area of ​​more than 150 square meters, the value-added tax rate will be 8%.

In the case of commercial and residential dual-use properties, the value-added tax rate is 18%.

What documents do Turkish citizens need to reside outside Turkey?

  • A work permit, or whatever documents it replaces, from the official embassies and consulates of Turkey in the country of residence.
  • A document proving that the Turkish citizen has resided outside Turkey for a period of at least six months before purchasing the property.

What documents does a foreign investor need in Turkey?

  • copy of the current valid passport.
  • A document stating that the buyer is not residing in Turkey, issued by the Turkish tax office, which requires submitting the following documents to the tax office:
  1. Notarized translation of the passport.
  2. Notarized proof of the foreign address outside Turkey.
  3. Passport processing from the Turkish Police Department.
  4. A letter from the General Directorate of Immigration stating that the applicant is not residing in Turkey.

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