VAT Exemption in Construction Donations – About, Application, Acceptance

VAT Exemption in Construction Donations to Public ( Part 1)

1- VAT Exemption

This kind of exemption is identified in 13/k clause of the VAT Law numbered 3065. The donation should be school, health facility and one hundred beds (fifty beds in priority areas for development), which are donated to public administrations, special provincial administrations, municipalities or villages with general and special budgets. Also, others are the places subject to the permission and supervision of the local governors, the religious education facilities subject to the supervision of the Directorate of Religious Affairs, the youth centers of the Ministry of Youth and Sport and the delivery of services to the donors for the construction of the youth and scouting camps. All of those mentioned are exempted from VAT.

1.1. Requirements for VAT exemption

• The construction will be donated to public administrations, special provincial administrations, municipalities and villages,
• This donation does not constitute the same kind of donation and is not intended for the maintenance, repair and maintenance of the facility.
• The nature of the construction is one of the following:

1. School,
2. Health facility,
3. Student dormitory not less than a hundred-bed capacity,
4. Kindergarten,
5. Orphanage,
6. Nursing home,
7. Maintenance and rehabilitation center,
8. Permission of local administrative authorities and supervised places of worship,
9. Facilities of general religious education subject to the supervision of the Presidency of Religious Affairs,
10. Youth centers belonging to Ministry of Youth and Sports,
11. Youth and scouting camps.

• Signing a donation protocol between the company and the company that will make the donation from the administrations and organizations mentioned in the 1.1.
• If the machinery, equipment and furnishing will be donated together with the construction of the facility, these products shall be clearly stated in the donation protocol for VAT Exemption,
• If a particular part of the facility is to be constructed, this is clearly stated in the protocol,
• The cost, technical specifications (open and closed area, number of classrooms) of the facility to be constructed, and the information such as the area to be constructed in the prepared protocol,
• To make a donation project for the companies to donate,
• Obtaining a construction license from the relevant authority (eg from Tekkeköy Municipality for construction in Samsun Tekkeköy district).
• If the facility to be donated will be constructed on an immovable belonging to the relevant administration and organization, the application project and construction license shall be taken by the relevant administration and organization mentioned.

1.2. Documents to be given to Municipalities or Governorships to Obtain Construction Permit

• Petition
• Commitment
• Title Deed
• Power of attorney and consent (when necessary)
• Architectural project
• Static project
• Electrical and mechanical installation projects
• Environmental and landscape projects –
• Road and infrastructure contribution share documents paid
• Other documents required for technical control (when necessary)

2- APPLICATION AND ACCEPTANCE

• The donors will submit the list of goods and services to be taken within the scope of the exemption to be prepared in accordance with the project and the license to the approval of the relevant administration and organization (eg. Tekkeköy Municipality).
• The donors will automatically list the goods and services approved by the relevant administration and organization.
• After getting the prepared application project and construction license from the relevant authority, it is applied to the Tax Office or to the Registry to obtain an EXCEPTION CERTIFICATE.
• The applied institution assesses whether the request meets the requirements and prepares a document based on this situation.
• In the document issued for acceptance of the application; it is stated that the application is in compliance with the exemption scope specified in article 13/k of the VAT Law.
• In the document, the list of goods deliveries and service performances is shown as a table.
• The exception is the amount of goods and services to be received with the exception.
• An example of the Exception Certificate received is to be given to the vendors during the procurement of goods and services to be subject to the exception and an exception is requested.
• The VAT Exemption condition covers the purchase of goods and services after 06/01/2018.
• The taxpayers who deliver or perform services within the scope of the exemption are subject to VAT.

Part 2 ( VAT Exemption : Exemption Certificate)

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