VAT, known locally as Katma Deger Vergisi (KDV), was introduced into Turkey in 1985. It is similar to the European Union’s VAT system, requiring re-calculation and payments to the tax authorities at each transaction point in the onward sales chain.
For foreign companies making taxable supplies in Turkey, there may be a statutory obligation to register for VAT. Once registered, non-resident traders must comply with local filing rules (see below).
Typical situations requiring a Turkish VAT registration include:
There is no threshold for registration in Turkey. It is compulsory to register in Turkey if taxable supplies are made.
In Turkey it is necessary for non-resident traders to form a permanent establishment in order to register for VAT. This can be in the form of either: a joint stock company; a limited liability company; or a branch. There are various requirements and obligations to set up a permanent establishment in Turkey, depending on the type of establishment. However since the "Foreign Direct Investment Act No:4875" entered into force as of June 2003, it is no longer necessary for foreign companies to gain any additional approvals or authorisation to set up a permanent establishment in Turkey that are not also applicable to resident traders.
Explore global VAT updates, new e-invoicing mandates, and key U.S. sales tax changes in this annual Avalara report.
Read the report to learn about key industry trends, emerging issues, and challenges faced by cross-border sellers and shippers.
Manage international tax with cross-border solutions for VAT, HS code classification, trade restrictions, and more.