Updated 14 October 2026 · Sources checked against GİB legislation and rate guidance.
Tax compliance in Turkey / Guidance for foreign businesses
Short answer: VAT in Turkey (Turkish VAT, called KDV) is charged at a general rate of 20%, with reduced rates of 10% and 1% for supplies in Lists II and I, under VAT Law No. 3065 Art. 28; the 20% rate applies since 10 July 2023 (Presidential Decree No. 7346). Registered businesses file a monthly VAT return and pay by the 28th of the following month. Services bought from a supplier without a Turkish place of business are taxed by reverse charge (Art. 9, VAT Return No. 2).
What VAT rate applies in Turkey?
Turkey’s general VAT rate is 20%. Supplies covered by List II generally use 10%, and those covered by List I generally use 1%. The legal classification of the supply, exemptions and any specific provisions determine the result. Check the Revenue Administration’s rate schedule before invoicing. The former general rates of 18% and 8% should not be used as current default rates.
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Start with the activity and the parties, rather than a turnover figure. Articles 1 and 9 of VAT Law No. 3065 address taxable transactions and tax responsibility. The general framework does not establish the TRY 130,000 registration threshold previously stated in this article. Do not wait for that amount before assessing obligations.
A Turkish subsidiary, a non-resident supplier and an overseas electronic-services provider can face different compliance routes. Establish who supplies what, where the service is used and who must account for VAT. The answer needs the actual contract and customer facts.
How should cross-border services be assessed?
For overseas services, examine Turkish tax responsibility and reverse-charge treatment under Article 9 and the VAT General Implementation Communiqué. An overseas invoice without Turkish VAT does not settle the Turkish customer’s obligations.
Foreign providers of electronic services to individuals in Türkiye who are not VAT taxpayers may fall within the special electronic-services VAT regime. Review the GİB guidance on that regime; do not treat every foreign supplier as an ordinary Turkish establishment.
What about filing and payment?
Confirm the applicable return type, reporting period and current submission and payment dates with the Revenue Administration. This guide does not offer a turnover-based choice between monthly and quarterly filing. Holidays, extensions and the particular return can affect dates; use current GİB guidance for the period you are filing.
Is excess input VAT automatically refundable?
No. Article 29 of VAT Law No. 3065 generally carries excess deductible VAT into later periods. A cash refund requires an applicable legal refund entitlement and supporting conditions. Startup expenditure or an equipment purchase alone does not establish that entitlement. Do not budget a guaranteed refund or fixed processing time without assessing the claim.
A checklist for the international finance team
- Identify the supplier, customer, establishment and transaction location.
- Document the supply classification and applicable rate or exemption.
- Check who must report VAT and which return applies.
- Reconcile invoices, import documents and VAT balances to the ledger.
- Separate deductible VAT, carried-forward balances and an evidenced refund claim.
- Confirm filing dates for the actual period before submission.
Sources and corrections
The linked GİB rate schedule, VAT Law and implementation guidance are primary sources. Correction, 14 October 2026: this article replaces its previous statements about 18%/8% default rates, a TRY 130,000 registration threshold, turnover-based quarterly filing and automatic excess-input-VAT refunds. Unsupported fixed fees, penalty percentages and processing-time claims have also been removed.
Editorial standards and correction requests · Ask SYSTEMS CPA about your transaction
This is general information. Check the rules effective for your transaction and obtain advice on your facts before making a filing or pricing decision.
Continue reading
- VAT registration for non-resident companies
- VAT refund questions
- Digital services tax
- Tax compliance support for foreign-owned companies in Turkey
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