VAT Refund on Export in Turkey

VAT Refund on Export

VAT is not calculated in export transactions in Turkey. In other words, VAT is not applied in the delivery of goods and services abroad. In the delivery of goods and services abroad, invoices are documented in accordance with this situation.

Article 11/1-a of the VAT Law No. 3065 has clearly stated that the goods and services delivered in exports are exempt from VAT. However, in accordance with Article 12, the following two conditions must be fulfilled in order to be considered an export (see. VAT Law):

• Delivery must be made to a customer abroad or to the buyer in the free zone or to the authorized customs warehouse operator or the goods must be deposited with the authorized customs warehouse operator.
• The goods must be delivered from Republic of Turkey to a foreign country or a free zone or exiting the customs territory by a foreigner.

The VAT that comes from delivery to the branch opened abroad by the taxpayers in Turkey will be exempt from VAT.

VAT Refund on Export

The exemption from VAT constitutes a disadvantage for the exporter. This disadvantage is the because of the production of goods and services. The production of goods and services, although they have paid VAT on the sale will not reflect this VAT to the buyer. The legislator takes this situation into account. The right of VAT Refund on what they have paid for the transactions subject to exportation. In order to have a VAT Refund on Exports, a report prepared by the Certified Public Accountant takes place. The CPA makes necessary calculations, decides the amount of refund and then submits its return report to the company’s tax office with the evidences.

If the commercial transactions of the company are only directed abroad, the VAT refund of all goods and services costs incurred until the limit specified in the law is taken.

If the commercial transactions of the Company are directed both at home and abroad; If the VAT to be paid out of domestic sales is lower than the VAT to be deducted from the company, the cost of goods and services for export to abroad shall be returned to the upper limit.

Also, the companies that have rights such as Inward Transaction Document, Incentive Certificate or Export Registered Sales for the export transactions they have made are sold without VAT. In this case, the right to return VAT for the seller institution arises.

Upper Limits for Refund Amount*

• According to Article 11/1-a, companies that demand VAT refund are those companies that export their products in general. Export deliveries, services for customers abroad, outsourced services for customers in free zones etc. are included for this article. The upper limit of VAT Refund on Exports is 695,000 Turklish Lira for 2019.
• Article 11/1-c covers The VAT about goods delivered exporters by the manufacturers. The VAT shall not be paid by the exporters. This tax, which is not collected by the manufacturers can be refunded. In case the goods are exported within 3 months from the beginning of the month following the delivery date of the exporter, the deferred tax will be canceled. In this transaction, the upper limit of VAT Return on Exports was determined as 695,000TL for 2019.
• Article 11/1-b covers the passengers who do not reside in Turkey. When they buy something in Turkey they can have their refund while gettin out from the country. VAT is collected during the sale of these goods. However, the customs fee collected by the invoice or document presentation will be refunded. In this type of return, the upper limit determined in 2019 is 183.000 TL.

*The specified upper limits are determined monthly.

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VAT Refund on Export