VAT Withholding (KDV Tevkifatı) and Its Role in the Turkish Tax System
VAT withholding (KDV Tevkifatı) is a system implemented in Turkey to secure tax collection and prevent the informal economy in specific sectors. As part of taxation in Turkey, this mechanism ensures that tax liabilities are fulfilled effectively by transferring a portion of the VAT directly to the tax office instead of the seller.
📌 As of 2025, for VAT withholding to apply in Turkey, the invoice amount (including VAT) must be at least TRY 9,900. This regulation is an essential part of the Turkish tax system, ensuring compliance and transparency in business transactions.
Below is a list of services subject to VAT withholding and the updated VAT rates in Turkey.
📌 2025 Updated VAT Withholding Types and Rates
1️⃣ Construction Works and Engineering-Architectural Services
✅ Scope: Buildings, bridges, highways, metro, dams, power plants, and related engineering, architectural, and project services.
💰 VAT Withholding Rate: 4/10
📢 The Turkish tax system requires construction-related services to comply with VAT withholding regulations to prevent tax evasion and ensure accurate tax reporting.
2️⃣ Feasibility, Planning, Consulting, and Audit Services
✅ Scope: Market research, appraisal services, technical, financial, and legal consultancy, audit, and project planning.
💰 VAT Withholding Rate: 9/10
📢 As part of taxation in Turkey, consulting and audit services are subject to high withholding rates to maintain financial transparency and prevent fraudulent tax deductions.
3️⃣ Maintenance and Repair Services for Machinery, Equipment, Fixtures, and Vehicles
✅ Scope: Factory machines, industrial equipment, elevators, cooling systems, vehicle maintenance.
💰 VAT Withholding Rate: 7/10
📢 Maintenance services are a key part of industrial operations, and under the Turkish tax system, VAT withholding helps regulate tax compliance in this sector.
4️⃣ Catering and Event Organization Services
✅ Scope: Catering services for companies, schools, hospitals, and organizations, as well as event planning.
💰 VAT Withholding Rate: 5/10
📢 The Turkish tax system ensures that service providers in the catering and event sector contribute properly to VAT collection.
5️⃣ Workforce Supply Services (Outsourcing)
✅ Scope: Subcontracted labor, security services, private drivers, technical support personnel.
💰 VAT Withholding Rate: 9/10
📢 Under taxation in Turkey, outsourced labor services are closely monitored to prevent tax evasion and ensure correct VAT payments.
6️⃣ Building Inspection Services
✅ Scope: Inspection services provided by building inspection firms for construction and infrastructure projects.
💰 VAT Withholding Rate: 9/10
📢 Building inspection plays a crucial role in real estate compliance, and the Turkish tax system applies VAT withholding to regulate the financial aspects of these services.
7️⃣ Cleaning, Environmental, and Landscaping Services
✅ Scope: Building cleaning, hospital sanitation, waste collection, pest control, park and cemetery cleaning.
💰 VAT Withholding Rate: 7/10
📢 These services are an essential part of municipal and corporate operations, and under taxation in Turkey, VAT withholding ensures fair tax contributions.
8️⃣ Shuttle Transportation Services
✅ Scope: Employee, student, and customer transportation services (shuttle services).
💰 VAT Withholding Rate: 5/10 or 9/10
📢 The Turkish tax system categorizes transportation services based on their operational structure to determine appropriate withholding rates.
9️⃣ Freight Transportation Services
✅ Scope: Road freight transportation services.
💰 VAT Withholding Rate: 5/10 or 9/10
📢 Freight services contribute significantly to taxation in Turkey, and VAT withholding helps ensure transparency in logistics and transportation.
🔟 Printing and Publishing Services
✅ Scope: Printing services for books, brochures, catalogs, magazines, bulletins, packaging.
💰 VAT Withholding Rate: 5/10 or 9/10
📢 As part of taxation in Turkey, printing and publishing services are subject to VAT withholding to prevent underreporting of revenues.
🔹 Other Services
✅ Scope: Services provided to public institutions that are not explicitly mentioned above.
💰 VAT Withholding Rate: 5/10 or 7/10
📢 The Turkish tax system includes VAT withholding on various government-provided services to enhance tax compliance and revenue collection.
🚀 Key Information About VAT Withholding in Turkey
✅ Split Invoicing is Not Allowed: Splitting the total transaction amount into multiple invoices to avoid VAT withholding is prohibited under the Turkish tax system.
✅ Legal Services: Legal representation is not subject to VAT withholding, but consultancy services provided by lawyers fall under VAT withholding rules, as part of taxation in Turkey.
✅ Private Security Services: The installation of security systems is not subject to VAT withholding, but the provision of security personnel is subject to withholding, ensuring compliance with Turkish tax system regulations.
This updated guide helps businesses understand their VAT withholding obligations and ensures compliance with taxation in Turkey. If you need expert assistance in VAT audits, ÖzbekCPA provides tailored tax consultancy services to help your business navigate the complexities of the Turkish tax system. Contact us for further information! 🚀
