Accounting Requirements for Foreign Companies in Turkey
E-ledger, e-invoice, statutory books, SMMM/YMM requirements, deadlines, and penalties — everything foreign subsidiaries, branches, and liaison offices need to know.
Turkey has fully digitized its accounting and tax infrastructure. For foreign companies operating through a local entity (joint-stock company, limited company, branch, or liaison office), compliance with the Turkish Commercial Code (TTC) and Tax Procedure Law (VUK) is non-negotiable. Paper ledgers are largely extinct — electronic bookkeeping (e-Defter) and e-invoicing are now mandatory for most businesses.
📒 1. Mandatory Books of Accounts (Defterler)
Every foreign-owned company or branch must maintain three core statutory books, either in electronic or physical format depending on revenue threshold:
| Book Name (Turkish) | English Equivalent | Description |
|---|---|---|
| Yevmiye Defteri | Journal | Chronological record of all daily transactions |
| Büyük Defter | General Ledger | Accounts summarized by ledger account |
| Envanter Defteri | Inventory / Balance Sheet Book | Year-end inventory, closing balances, financial statements |
Electronic era (e-Defter): As of 2026, any taxpayer whose gross revenue exceeds TRY 3 million (approx USD 90,000) in the previous fiscal year must keep e-Defter. All joint-stock companies (A.Ş.) regardless of revenue are required to use e-Defter from incorporation.
🧾 2. E-Invoice (e-Fatura) & E-Archive Mandate
Foreign companies cannot escape the e-transformation. Since 2025, mandatory e-invoice applies to:
- All joint-stock companies (A.Ş.) — regardless of revenue
- Limited companies (Ltd. Şti.) and branches with annual turnover exceeding TRY 3 million
- Any taxpayer registered for VAT (recommended even below threshold)
e-Archive: Required for invoices issued to non-registered individuals/consumers — stored digitally and reported monthly.
👔 3. Who Can Handle Your Accounting? (SMMM vs YMM)
Unlike many jurisdictions, Turkish law requires that the person responsible for accounting records and tax declarations must be a chamber-registered professional:
| Designation | Turkish | Authority | When Required |
|---|---|---|---|
| SMMM | Serbest Muhasebeci Mali Müşavir | Certified Public Accountant | Monthly accounting, tax returns, e-ledger submission |
| YMM | Yeminli Mali Müşavir | Sworn-in Financial Advisor | Ledger certification, tax audits, legal representation, high-value transactions |
Can a foreign company use an internal unlicensed bookkeeper? No. Internal staff can prepare internal reports, but only an SMMM or YMM can sign off statutory financial statements and submit e-ledger approvals to GİB.
📊 4. Financial Statements & Independent Audit Thresholds
Under the Turkish Commercial Code, foreign subsidiaries may be subject to independent audit if they exceed 2 of 3 criteria for two consecutive periods:
| Criteria | Threshold (2026) | Approx USD |
|---|---|---|
| Total Assets | TRY 60 million | $1.8 million |
| Annual Net Sales Revenue | TRY 80 million | $2.4 million |
| Number of Employees | ≥ 150 | – |
Even below thresholds, parent company requirements or sector-specific regulations (banking, energy, fintech) may mandate an independent audit by a KGK-registered audit firm.
Submission deadline: Annual financial statements + auditor’s report must be submitted to the Trade Registry Gazette within 4 months after year-end (April 30 for December year-end).
📅 5. Key Accounting & Reporting Deadlines (2026)
| Obligation | Frequency | Deadline | Late Penalty |
|---|---|---|---|
| E-ledger submission (Berat) | Monthly | Last day of following month | TRY 5,400 – 22,000 / month |
| VAT return & payment | Monthly | 26th of next month | 1% of tax + 1.4% monthly interest |
| Withholding tax (WHT) return | Monthly / Quarterly | 26th of next month / quarter+1 | TRY 1,400 – 27,000 |
| Annual financial statements approval | Yearly | Within 4 months after year-end | Delay fine + trade registry penalty |
| Inventory book closing (physical books) | Yearly | Before June 30 | TRY 2,000 – 10,000 |
🏢 6. Special Case: Liaison Offices (İrtibat Bürosu)
Foreign companies may open a liaison office that is prohibited from commercial activity (market research, representation only). Accounting requirements:
- Must keep accounting records for expenses and proof of no revenue generation
- No corporate tax, but must submit annual activity report + expense log to Ministry of Trade
- E-invoice not mandatory but recommended for expense invoices from local suppliers
- Must appoint a local SMMM to prepare periodic expense reports and cash book
💱 7. Foreign Currency Accounting Rules
All mandatory books must be kept in Turkish Lira (TRY) and Turkish language. However:
- Foreign-currency transactions recorded at TCMB (Central Bank) effective exchange rate on transaction date
- Year-end valuation of FX assets/liabilities using official rates is mandatory
- Unrealized exchange gains/losses recognized in P&L for tax purposes
- No “functional currency election” for tax accounting — books must always show TRY equivalents
📌 8. How to Set Up Accounting for a Foreign Entity: Step by Step
Register with local tax office or via e-Devlet portal.
Choose a chamber-registered professional. Verify their license online.
Apply through GİB portal with your VKN and electronic signature.
Use GİB-compatible software (e.g., Logo, Mikro, Netsis) that supports e-ledger BERAT output.
Monthly e-ledger, VAT returns, WHT returns.
Inventory count, TFRS financials, independent audit if threshold exceeded.
Annual financial statements by April 30.
❓ Frequently Asked Questions
What accounting books must a foreign company keep in Turkey?
Every foreign-owned company or branch must maintain three core statutory books: Journal (Yevmiye Defteri), General Ledger (Büyük Defter), and Inventory Book (Envanter Defteri). Most companies now use electronic versions (e-Defter).
Is e-invoicing mandatory for foreign companies in Turkey?
Yes, if annual gross revenue exceeds TRY 3 million (approx USD 90,000) or the company is a joint-stock company (A.Ş.). All joint-stock companies must use e-invoice regardless of revenue as of 2025.
Who can legally handle accounting for a foreign company in Turkey?
Only Certified Public Accountants (SMMM) or Sworn-in Financial Advisors (YMM) registered with a local chamber can sign off statutory financial statements and submit e-ledger approvals. Internal unlicensed staff cannot perform these functions.
What is the penalty for not having an approved e-ledger?
Monthly fines ranging from TRY 5,400 to TRY 22,000 (approx USD 155-635). Additionally, the company will be blocked from issuing e-invoices and cannot obtain tax clearance certificates needed for tenders or bank loans.
Can a liaison office use simplified accounting?
Yes, liaison offices (no commercial activity) only need to keep expense records and a cash book. However, they must still appoint an SMMM to prepare periodic reports. E-invoice is optional but recommended.
What language and currency must accounting records be in?
Turkish language and Turkish Lira (TRY). Foreign currency transactions must be converted to TRY at TCMB rates on the transaction date. Year-end FX valuation is mandatory.