29.05.2021
For customers abroad (buyers whose residence, workplace, legal and business center are abroad, and a branch, office, representative and agency of a company located in the country operating independently on its own behalf abroad), services made in Turkey and used abroad are exempt from VAT. In order for a given service to be evaluated within the scope of export exemption;
- The service must be performed in Turkey for a customer abroad (in order to certify this transaction, an invoice or similar document must be issued on behalf of the customer abroad).
- The service must be used abroad.
Pursuant to the VAT General Implementation Communiqué, which includes the above-mentioned provisions of the VAT Law and the explanations on the subject, the services rendered for the customers abroad will be declared within the scope of export exemption at the time the service is provided without waiting for the fee to be received in Turkey in foreign currency. However, in the refund of the taxes incurred in relation to the transactions declared in this way and which cannot be deducted, within the scope of Article 32 of the VAT Law, a payment document (a document proving that the foreign currency was brought to Turkey, a bank receipt, etc.) will be sought.
In the modification, maintenance and repair services of foreign-flagged ships that do not have the right to transport within Turkey, provided that the ship’s entry and exit from the shipyard is proven with a document to be given by the Port Authority, 50% of the VAT incurred due to the service within the scope of the exception and which cannot be compensated through discount, is returned without seeking a document proving that the service fee was brought to Turkey in foreign currency. The remaining part of the VAT to be refunded, is refunded at the rate that half of the transaction fee is brought to Turkey in foreign currency.
Source: Revenue Administration of Turkey – Translated by: Karen Audit
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.
