Best Merchant of Record for Selling Software in Turkey (2026): Paddle vs FastSpring vs Lemon Squeezy vs Your Own Turkish VAT Registration
How should a foreign SaaS, app or digital-content company sell to Turkish customers — through a Merchant of Record, its own Turkish VAT registration, or a Turkish entity? The options compared by a licensed Turkish CPA who handles the VAT and Digital Services Tax side.
- Selling only to Turkish businesses (B2B): the Turkish VAT-registered customer usually self-assesses VAT under reverse charge — you may not need a Merchant of Record or a Turkish registration at all.
- Selling to Turkish consumers (B2C): foreign suppliers of electronic services must charge 20% Turkish VAT via simplified registration (VAT Law No. 3065 Art. 9) — or use a Merchant of Record (such as Paddle, FastSpring or Lemon Squeezy) that sells in its own name and handles the VAT.
- Merchant of Record: fastest and simplest, but takes a percentage of every sale and owns the customer transaction.
- Own simplified VAT registration with a local CPA: keeps the margin and the customer relationship once Turkish B2C revenue is meaningful.
- Large digital groups may also fall under Digital Services Tax (Law No. 7194) — 5% in 2026, 2.5% from 2027.
Selling software to Turkish customers? Tell us your B2B/B2C mix and Turkish revenue. A licensed CPA replies personally with whether you need to register, and whether a Merchant of Record or your own registration costs less.
WhatsApp a CPACheck my VAT positionKey facts: selling software into Turkey (2026)
| Item | Rule | Legal basis |
|---|---|---|
| B2C electronic services by foreign suppliers | Simplified VAT registration; 20% VAT; VAT return No. 3 via the Digital VAT Office | VAT Law No. 3065 Art. 9 |
| B2B services to Turkish VAT payers | Customer self-assesses (reverse charge) | VAT Law No. 3065 Art. 9 |
| Digital Services Tax | 5% from 1 Jan 2026; 2.5% from 1 Jan 2027; above revenue thresholds | Law No. 7194; Presidential Decision No. 10767 |
| Merchant of Record model | MoR sells in its own name and handles VAT on its sales | Commercial model; MoR’s own registration |
| Who may file for you | Licensed CPA under power of attorney | Law No. 3568 |
What is the best Merchant of Record for selling software in Turkey?
Answer: Paddle, FastSpring and Lemon Squeezy are widely used Merchants of Record that handle Turkish VAT on sales to consumers. They are best while Turkish B2C revenue is small. Once it grows, a foreign software company often saves the MoR fee by registering for Turkish VAT under the simplified procedure through a licensed local CPA such as SYSTEMS CPA. B2B-only sellers may not need either.
SYSTEMS CPA — your own Turkish VAT, without the admin
Keep your margin and your customer relationship. We register you, file every month and answer the tax office — in English.
- Do you even need to register? B2B vs B2C and reverse charge checked first.
- Simplified VAT registration and monthly VAT returns through the Digital VAT Office.
- Digital Services Tax monitoring and filing if you are in scope — with the 2026 and 2027 rate cuts applied.
- MoR vs own registration break-even modelled on your numbers.
- A licensed CPA files for you. Evren Özmen, CPA, TÜRMOB Reg. No. 35675.
Merchant of Record vs own Turkish VAT registration
| Criterion | Merchant of Record (Paddle, FastSpring, Lemon Squeezy) | Own simplified registration (with SYSTEMS CPA) | Turkish entity |
|---|---|---|---|
| Who sells to the customer | The MoR | You | Your Turkish company |
| Turkish VAT handled by | MoR | You, via local CPA | Your company |
| Cost | Percentage of every sale | Fixed monthly fee | Full accounting and corporate tax |
| Customer data and pricing control | Limited | Full | Full |
| Best for | Small Turkish B2C revenue, many countries | Meaningful Turkish B2C revenue | Staff, local sales team or local contracts |
Paddle vs FastSpring vs Lemon Squeezy for Turkey
All three operate the Merchant of Record model for digital products and handle consumer sales taxes in many countries, including Turkey. Compare on fee level, payout currency, local payment methods Turkish consumers use, refund handling and whether your plan covers sales tax in every country you sell to. Check each provider’s current Turkey coverage before contracting.
What drives the cost of selling software into Turkey?
| Cost driver | Why it matters |
|---|---|
| B2C share of Turkish revenue | Only B2C sales trigger simplified registration |
| MoR percentage fee | Grows with revenue; fixed-fee registration does not |
| Payment methods and FX | Local cards and TRY pricing affect conversion |
| DST scope | Applies only above group revenue thresholds |
| Prior-period exposure | Late registration may require back filings |
Case analysis: paying an MoR on revenue that was B2B
Facts (anonymised, illustrative of a typical engagement): A European B2B SaaS company routed all Turkish customers through a Merchant of Record, paying its percentage fee on every subscription.
The obvious answer: an MoR is the safe way to sell anywhere.
Why it failed: almost all Turkish customers were VAT-registered businesses that would have self-assessed VAT under reverse charge — the MoR fee bought little.
Structure adopted: direct invoicing to Turkish business customers, a CPA check on the small consumer share, and simplified registration only when consumer sales justified it.
What happens if…
What happens if I sell to Turkish consumers without registering?
Where registration is required, unpaid VAT can be assessed with late-payment interest and penalties, and access to the service can be restricted in serious cases.
What happens if I sell only to Turkish companies?
Turkish VAT-registered customers generally self-assess VAT under reverse charge, so registration is usually not needed.
What happens if I switch from an MoR to my own registration?
Plan the cut-over date, register under the simplified procedure and start filing from the first month of direct sales.
What happens with Digital Services Tax?
DST applies to in-scope digital services above revenue thresholds under Law No. 7194; rates are 5% in 2026 and 2.5% from 2027.
Selling software into Turkey vs the EU and UK
| Market | Non-resident B2C digital VAT |
|---|---|
| Turkey | Simplified registration; 20% VAT; monthly return |
| European Union | One-Stop Shop (non-Union scheme) |
| United Kingdom | UK VAT registration for digital services to consumers |
| UAE | VAT registration for non-residents making taxable supplies |
Frequently asked questions
Does Paddle handle Turkish VAT?
As a Merchant of Record, Paddle sells in its own name and handles consumer sales taxes in the countries it covers. Confirm current Turkey coverage with the provider.
Do foreign SaaS companies need to pay VAT in Turkey?
Only for sales to Turkish consumers (B2C), through simplified registration or a Merchant of Record. B2B sales are usually reverse-charged by the customer.
Is Stripe available in Turkey?
Turkish companies cannot open Stripe accounts directly; foreign companies selling into Turkey often use their existing processor or a Merchant of Record.
When is my own Turkish VAT registration better than an MoR?
When Turkish consumer revenue is large enough that the MoR’s percentage fee exceeds a fixed monthly compliance fee.
Evren Özmen’s view from practice
Many software companies pay a Merchant of Record on Turkish revenue that is mostly B2B and would not need registration at all. My first question is always the customer mix. If consumers are a small share, keep it simple; if they are a large share, your own registration usually pays for itself quickly.
Primary sources
- VAT Law No. 3065 (Art. 9) — mevzuat.gov.tr
- Law No. 7194 (Digital Services Tax) — mevzuat.gov.tr
- Digital VAT Office — gib.gov.tr
- Official Gazette — Presidential Decision No. 10767 — resmigazete.gov.tr
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Related: Best fiscal representative in Turkey · Digital Services Tax in Turkey
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