The VAT Law No. 3065 contains different applications subject to VAT refund. One of these is the “Delivery of Incentive Investment Goods” under Article 13/d of the Law.
Pursuant to this article, invoices issued by the seller are exempt from VAT and are eligible for refund.
Points to Consider When Issuing Sales Invoices
When issuing invoices for machinery, equipment, or investment goods listed in the investment incentive certificate annex, the seller must take the following information into account:
- Delivery code subject to exemption (308-13/d Delivery of Incentivized Investment Goods)
- Investment Incentive Certificate series and number
- Investment Incentive Certificate date
- Sequence number and description of the incentivized goods subject to investment in the attached list
Requirements for VAT Refund
For the seller to be able to request a refund under this article:
- The buyer to whom the invoice is issued must have an Investment Incentive Exemption Certificate, and the investment goods subject to the transaction must be included in the list.
- The investor must enter the incentive invoice through the Ministry of Industry and Technology E-TUYS system and prove that it is related to the investment goods.
Otherwise, the seller cannot request a refund for an invoice that has not been entered into the system by the investor.
In this case, incorrect entries made by the investor are reflected in the VAT Refund system as the “GEK63” error segment.
Required Lists for VAT Refund
When requesting a VAT refund under Article 13/d of Law No. 3065, the following documents must be prepared:
- Standard Refund Request Form
- List of VAT to be Deducted
- List of VAT Incurred
- VAT Refund Calculation Table
- List of Sales Invoices
- Exemption Notification Form (Form 9/B)
- Document proving the buyer’s VAT exemption right (certified copy)
- Certified copy of the Investment Incentive Certificate and its global list attachment
Important Points When Preparing Lists Under 13/d
- The date of the latest invoice on the list of VAT incurred should not be later than the date of the latest invoice on the list of sales invoices.
- The Sales Invoice List and the 9/B Exemption Notification Form must be consistent.
- The goods descriptions on the invoices must be exactly the same as the descriptions in the YTB annex global list.
Otherwise, the system will generate “GEK07” or “GEK64” error segments.
Tax offices may also typically request the following documents in hard copy:
- Wet-signed Sales Invoice List
- Wet-signed 9/B Exemption Notification Form
- Approved exemption certificate
- Approved copy of the YTB or electronic document screen shots
Financial Leasing Under the Investment Incentive Certificate
Pursuant to Article 13/d of Law No. 3065, financial leasing is possible under the investment incentive certificate.
- Machinery and equipment to be procured under the certificate can be purchased on credit through a financial leasing company.
- The invoice for the machine is issued to the financial leasing company, and the machine is transferred to the investor when the payments are completed.
- In this method, the collateral is the machine itself; if the installments are not paid, the financial leasing company can repossess the machine.
- In terms of legislation, the financial leasing company and the incentive certificate holder company are jointly and severally liable.
Financial Leasing Application
- The application is made through the E-TUYS system.
- The leasing company is registered in the system with its tax number, and a certificate of no SGK debt is added.
- Both parties complete the application, and the transaction is carried out with the approval of the Ministry.
Note:
- All VAT Refund Requests Any type of refund arising from VAT must be requested by the end of the second year following the refund request period.
- For example, if a taxpayer’s VAT refund is calculated in the January 2024 period and their VAT refund is also calculated in the July 2024 period, the final application date is December 31, 2026, which is valid for both periods.
- Consequently, the final application date for taxpayers with VAT refunds related to the 2023 accounting period is December 31, 2025.
- Applications made after these dates are RED and transferred to the treasury.
The delivery of incentive investment goods and the VAT refund process is a process that must be carefully managed by both sellers and investor companies. If the correct documentation and E-TUYS records are not provided, VAT refund requests are rejected or system errors occur. Therefore, professional management of these processes will prevent both time and cost losses.
For detailed information and professional advice, you can contact us at OzbekCPA.
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