What are the features of service export?
Services providing in Turkey and benefited abroad are exempt from VAT for the customers abroad (branch, office, representative and agency of a company located in Turkey carrying on its business abroad and independently on its behalf and receivers of which residence, workplace, legal and head office abroad).
In order to regard the service as an export exception, it is required to;
- Provide service in Turkey for a customer abroad, (issuing invoice or similar document on behalf of customer abroad to certify this transaction)
- Benefit from this service abroad.
The services carried out for customers abroad will be declared within the scope of export exception in the term when service has been carried out, without waiting that the fee reaches to Turkey as currency, pursuant to Communiqué on General Practice of VAT involving explanation on the matter with the provisions of VAT Law. However, receipt of payment (a document confirming that the foreign currency brought into Turkey, bank statements, etc.) will be requested for the refund of the taxes, which are imposed regarding the transactions declared in this way and are not subjected to any discount, within the scope of Article 32 of the VAT Law.
In modifications, repair and maintenance services of foreign-flagged vessels, which do not have right to transport in Turkey, 50 percent of VAT, which is imposed because of services within the exception and cannot be compensated through discount, will be refunded regardless of demanding a document confirming that the service fee comes to Turkey as currency, provided that the vessel is entering and leaving the shipyard with the document to be given by the Port Authority. The rest of VAT to be refunded, is returned at a rate that the half of the fee related to transaction brought to Turkey as currency.
Source: GIB
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