Although theoretically VAT is value added tax, in practice it is similar to VAT when every merchant adds this tax to the invoice issued and accounts his own tax for the subsequent apply to the tax authorities. That is an indirect tax. The burden of payment falls in the end not to the traders but to final consumers of goods and services.

This taxation system is designed to avoid paying tax on the tax due to the fact that goods and services are undergoing a long path to the consumer; within the VAT system all goods and services bear only the tax which is taxed at the final sale of goods to the consumer.

The interest rate may vary depending on the type of product. However, the buyer has the right to deduct the amount of tax which he discharges it invoices to pay for goods and services (but not in the form of salary or wages).

For Turkey, the VAT is value added tax, and is relatively young one. For the first time, a bill regulating the procedure of payment and deduction of VAT was introduced in 1974. During 10 years it has been discussed at various levels of public opinion in Turkey, and having undergone eight revisions, was finally adopted on November 2nd, 1984 and entered into force on January 1st, 1985. With the entry into force of the law on VAT in Turkey eight indirect taxes on consumption were cancelled, that greatly eased the Turkish economy. In Turkey the company owner may include to the usual in Russia accounts for expenditure of the company the deductible provided invoices, also invoices for the purchase of image things for himself, clothes, food, restaurant bills, purchased gasoline and etc. In payment documents in Turkey VAT is allocated a separate line-KDV.

Tax rates of value-added tax in Turkey:

  • Standard rate of VAT in Turkey-18% (also applicable to real estate and homes, with a total area of more than 150 sq.m.)
  • On financial leasing services, etc. - depending on the VAT on the leasing objects
  • 8% VAT in Turkey-basic food (including milk, eggs, cheese, honey, etc.), fresh vegetables and fruits, concert tickets, theater, movies, books, baby food, honey, Serum, immunoglobulin, blood products, vaccines, pharmaceuticals, imported with the permit and the license of the Ministry of health, etc.
  • 1% as VAT is charged in Turkey with sales of houses with total area up to 150 sq. m, agricultural products, bread, newspapers, used engines, trafficking in items of financial leasing (at the standard rate of tax valid since December 30th, 2007), transfer of control, the provision of blood and blood components for humans and animals, funeral services, etc.


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