VAT Refunds for Non-Resident Companies in Turkey

VAT refunds for non-resident companies in Turkey turn on one question: whether the company is registered for VAT in Turkey. The refund mechanism is built on registration, because it runs through the VAT return and through input tax recorded in the taxpayer’s own statutory books. A foreign company with no place of business and no permanent representative in Turkey therefore cannot claim a refund under the general rules. This page sets out the registration requirement, the transactions that give rise to a refund, the amount and time limits, and the two cases in which a refund is possible without a place of business in Turkey.

Can a non-resident company claim a VAT refund in Turkey

A VAT refund is a right attached to registration. Because the refund is computed on a filed VAT return and on input tax recorded in the taxpayer’s statutory books, a company that is not registered for VAT in Turkey cannot claim a refund under the general rules.

Foreign companies that register for VAT by opening a branch, an office or a permanent representation in Turkey do have the right to a refund. At that point there is no obstacle and no separate amount limit specific to non-residents: a non-resident company with a registered place of business or permanent representative is subject to the same procedures, the same documentation and the same audit thresholds as a resident company.

Refunds without a place of business: transporters and fair participants

There are two exceptions to the general rule. Companies with no residence, place of business, legal seat or effective management in Turkey can obtain a VAT refund on the basis of reciprocity in the following two situations:

• Foreign transport companies engaged in international transport: input tax on fuel, spare parts, maintenance and repair services bought in Turkey
• Foreign companies taking part in fairs, exhibitions and trade shows in Turkey: input tax on participation, accommodation and organisation costs

Reciprocity means that the refund is made only where the company’s country of residence grants a comparable refund to companies resident in Turkey. Which countries reciprocity exists with is determined by the tax administration and can change, so it should be confirmed before an application is made.

This refund is not claimed through a return but by direct application: the claim goes to the competent tax office, it is based on the calendar year, and the originals of the documents evidencing the input tax are required together with a certificate of tax residence. As no registration is established, no deduction right arises; the mechanism is confined to the refund.

Transactions that give rise to a refund

A registered non-resident company can only recover tax that it bore in connection with activities listed in the law as giving rise to a refund, and that it could not eliminate by deduction.

Reduced-rate transactions appear in the list but rest on a different legal basis and follow a different procedure; they are dealt with separately below. Deliveries under an inward processing authorisation and exemptions arising from international agreements also give rise to a refund.

The branch link: which input tax qualifies

The right to a refund is confined to tax borne on purchases of goods and services recorded in the statutory books of the place of business or permanent representation in Turkey and directly related to its own activity.

Tax on expenses incurred abroad by the foreign parent cannot be reclaimed in Turkey. As that tax is not Turkish VAT, no deduction right arises either. Where the parent recharges a share of costs to the branch in Turkey, two questions have to be resolved together: whether the recharged amount is consideration for a service subject to VAT in Turkey, and which activity the reverse-charge VAT declared on it relates to.

• Invoices and documents issued in the name and tax number of the branch
• A traceable link between the input tax and the transaction giving rise to the refund
• Where both qualifying and non-qualifying transactions exist, input tax split by an allocation key
• On purchases of depreciable fixed assets, the refund confined to the related share
• Reverse-charge VAT actually paid

Full exemption refunds compared with reduced-rate refunds

The two mechanisms are often confused. Their legal basis, their timing and their thresholds differ:

In reduced-rate refunds the threshold is deducted from the amount accumulated during the year; no refund file can be opened for an amount below it. The threshold is reset each year and applies only to this type of refund. No such threshold exists for a refund arising from a full exemption.

Which rate applies to a reduced-rate delivery is determined by the delivery itself. Construction services, for example, are taxed at the standard rate; the reduced rate applies to deliveries of residential units meeting defined criteria. Rates in food, pharmaceuticals, health, education and accommodation likewise vary by product and service, so the applicable rate should be confirmed before the refund is computed.

Amount limits and the control method

There is no ceiling on the amount that may be claimed. The size of the amount determines which control method applies before payment.

Claims for a refund by offset are met regardless of amount, without a guarantee, a report or an audit, and are set against the taxpayer’s own tax liabilities. For cash refunds, the part not exceeding the prescribed limit is paid without a guarantee, a certification report or a tax audit, once any discrepancies raised in the VAT refund control report have been resolved. For 2026 that limit is 50,000 lira.

Cash refund claims above the limit require either a certification report from a sworn-in certified public accountant or a tax inspection report before payment. Where the taxpayer does not want to wait for the report, payment can be accelerated by providing a bank letter of guarantee for the amount of the refund, which is released when the report is submitted. The certification report is issued by a sworn-in certified public accountant and cannot be provided under a certified public accountancy licence.

Maximum refundable amount

The amount refundable in a tax period cannot exceed the figure found by multiplying the value of the qualifying transactions in that period by the standard rate. As the standard rate is 20 per cent, the maximum refund on an export of 1,000,000 lira is 200,000 lira.

Where directly attributable input tax exceeds that limit, the excess can be refunded only on the basis of a tax inspection report. Input tax on purchases of depreciable fixed assets is assessed outside that limit and is refunded under its own procedure.

Time limits: deduction and the refund claim

Two separate periods run together and are frequently confused.

Tax on a document not recorded in the books by the end of the calendar year following the year in which the taxable event occurred cannot be deducted, and tax that cannot be deducted cannot be refunded either. The refund claim must be entered in the system with the standard refund application and the electronic lists by the end of the second calendar year following the period of the transaction. Once that period passes, the right to a refund lapses.

How the refund process runs

1. Completing the refund line on the returnThe qualifying transaction and the input tax are shown on the refund line of the return for the relevant period. An amount not shown on the return cannot be claimed later.
2. Preparing the electronic listsThe deductible VAT list, the input tax table, the sales invoice list and the documents specific to the transaction type are entered through the tax administration’s online system.
3. Filing the standard refund applicationThe relevant application is filed according to whether a refund by offset or a cash refund is sought. For a cash refund the bank account details are notified.
4. Reviewing the control reportThe system scans the chain of suppliers and produces a control report. Purchases flagged as problematic are explained, or the related amount is removed from the claim.
5. Certification report, audit or guaranteeFor cash claims above the limit, a certification report from a sworn-in certified public accountant or a tax inspection report is submitted; where waiting is not acceptable, a guarantee is provided.
6. Payment and release of the guaranteeThe refund is paid to the taxpayer’s bank account in Turkey or set against tax liabilities. Where a guarantee was provided, it is released on submission of the report.

• Treating carried-forward VAT as refundable. A refund also requires a qualifying transaction; a branch selling only domestically cannot obtain a refund.
• Putting the parent’s foreign expenses in the refund file. That tax is not Turkish VAT; it is neither deductible nor refundable.
• Invoices not issued in the branch’s name. Tax on a document issued to the parent or to a group company cannot be deducted or refunded by the branch.
• Claiming a reduced-rate refund in cash during the year. During the year it can only be claimed by offset; the cash refund is claimed between January and November of the following year.
• Confusing the two-year period with the filing deadline. Completing the refund line on the return does not preserve the right unless the application and lists are filed.
• Expecting a refund through a liaison office. The office is not a VAT taxpayer, and the tax it bears remains a cost.

Frequently asked questions