Value Added Tax (VAT) is a broadly based tax on consumer spending and is generally neutral in its effect on businesses. Briefly, it’s a general consumption tax that covers all goods and services which is applied to all stages from producer to consumer and is calculated on transaction value with related rate.
In Turkey, all goods and services that are supplied/rendered within the scope of commercial, industrial, agricultural and professional services etc. activities are subject to value-added tax (VAT). The importations of goods and services into Turkey are also subject to VAT.
VAT is levied at each stage of the production and the distribution process.
Although liability for the tax falls on the person who supplies or imports the goods or services, the real burden of VAT is borne by the final consumer.
| Purchase price of good | 100 TL | |
| Input VAT | 18 TL | |
| Total amount | 118 TL | |
| VAT is not calculated on this profit and the final consumer should pay | 250 TL | |
| Selling price of good | 150 TL | input vat 18 |
| Output VAT | 27 TL | output 27 9 must be paid to tax office |
| Total Received amount | 177 TL | input vat 27 OUTPUT VAT 18 9 TL HAND OVER AS A CREDIT TO THE FOLLOWING MONTH |
HAND OVER AS A CREDIT VAT paid to tax office | 9 TL (50 x %18 ) | |
| Profit | 50 TL | |
| The final consumer should pay 177 TL. | ||
The standart rate of VAT is 18 percent.
Besides, there are two reduced VAT rates and exemptions. Which are 8 percent and 1 percent.
The goods and services subject to the reduced rate of 8 percent are ;
The goods and services subject to the reduced rate of 8 percent are ;
The taxation period for VAT purposes in one month and a VAT return should be filed by the 24th day of the month following the end of the taxation period and the tax should be paid on 26th day of the same month . The VAT return should be filed for each month even if no deliveries subject to VAT have been made. During declaration, if any return claim has arised due to any reasons, this claim has to be declared in the VAT declaration in advance.
Taxpayers can submit their VAT returns electronically.
VAT on importation is declared in the customs entry decleration. If this form is not used, import VAT must be reported in a special return.
Taxable persons record VAT seen on the invoices or other relevant documents as input VAT their accounting entries and deduct input VAT from VAT collections (output VAT) from supply of goods or services monthly basis.
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