If you’re selling digital services and products to customers in Turkey, then you might be liable for Turkey’s Value-added Tax (VAT). This guide covers two very important parts of the system:
- Registering for the tax, and then
- Filing tax returns on time.
We’ve scoured theTurkish Revenue Administration’s website to provide you with all the necessary information about VAT for international businesses in one place.
How to register for VAT in Turkey
Turkey offers online VAT registration in English (and Turkish, of course). For foreign businesses, it’s called “Special VAT Registration for Electronic Service Providers.”
This takes place in the online portal, VAT Office for Electronic Service Providers. This portal is also where you’ll file and pay your tax returns. More on that later!
Note: If you want to be really sure that you must register, feel free to take the Revenue Administration’s online test. It’s just 5 questions to determine your liability and takes only a couple minutes!
The first step is tofill out an application, which you can do by visiting this VAT Office page and clicking Apply.
In the window that pops up on the screen, you’ll answer questions about your business, the services you provide, and necessary contact information.
Before you get started, make sure you have this info handy:
- Tax ID number from your home country
- All business other details like phone, email, address, URL, etc.
Once you submit your application, check your email. You’ll receive a usercode (Application OID) and password. You can use these to check your application status, back at the exact same spot where you applied. Click the Application Result tab, enter the login credentials, and check your status!
Ultimately you’ll receive a Turkish VAT number. This tax ID is a unique identifier they’ll use to identify you in the system, and which you’ll need to put on invoices, etc.
How to file VAT returns in Turkey
You must report your taxes in the local currency, Turkish lira. Your foreign currency must be converted into lira using the exchange rates of the Central Bank of The Republic of Turkey according to “the date of taxable event.” That might mean you need to search the calendar date of each taxable transaction and use that day’s exchange rate.
Note: If your foreign currency isn’t included on the Central Bank’s archive, then simply use the current exchange of the Turkish lira on the day you’re filing.
When to file and pay
You must file a VAT return monthly. The deadline for declarations and payments is the 26th of the month” following the end of a reporting period.
So, for example, you’ll need to file and pay August’s VAT by September 26. (You technically have the whole day of the 26th, according to Turkey’s time zone, but better to do it early, right?)
Note: Turkey does not require a nil declaration, meaning if you didn’t make any taxable sales that month, then you don’t need to file! Only file when you have something to report.
How to file
Before you get started, you should collect all the information about your taxable sales in Turkey during the previous quarter. The tax website suggests having these pieces ready:
- total sales and income
- total purchases and expenses
- a list of all B2B sales made to Turkish businesses, even if you used the reverse-charge mechanism*
*In addition to declaring the VAT you’ve collected, Turkey wants a report of your B2B transactions. This list should contain specific information in XML format (see screenshot below). You can access these guidelines by visiting the VAT Office, clicking Information, then selecting the B2B Sales List tab.
Once you’re ready to file, you can do so in your online account. Go here and click Sign In in the top right corner.
The form you’ll fill out electronically is officially called VAT Declaration No. 3, but the portal should offer clear sections and buttons for filing and declaring your taxes.
How to pay
Payments are made in Turkish lira, but no currency conversions are necessary here since foreign bank and debit cards are accepted! You can pay directly in the portal during the filing process (recommended) or separately send an EFT through your bank.
Pay via portal
After submitting the tax return through the system, click the Payment button on the right.
When you click Pay, you’ll then see a Foreign Payments screen, where you can pay using bank and debit cards.
Note: The payment information is not stored in the Revenue Administration’s system and the safety controls are provided directly by your bank.
Send an EFT
If you would rather organize a bank transfer, you should use the following information for Turkey’s Large Taxpayer Tax Office.
IBAN Information of the Large Taxpayer Tax Office:
Payment via "T.C. Ziraat Bank" account of "Büyük Mükellefler" Tax Office
Bank: T.C. Ziraat Bankası
Account Owner: Büyük Mükellefler Vergi Dairesi Başkanlığı
Account Number: 47010330 - 5001
Branch Code: 0757 – Mecidiyeköy Şubesi
In the payment description field, you should include:
- Your tax identification number in Turkey
- The tax code for VAT Return (Vergi Kodu:0055)
- The VAT return period (month and year)
What to do in between registering and filing?
Well, you must comply with all the rules for Turkish VAT! That means charging 18% VAT on all B2C sales in the country, among other things.
For further reading that will help you stay compliant and successful as a remote seller, check out our Turkey VAT Guide for Businesses.
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the Tax Agency.