Under Article 11/1-a of the Turkish Value Added Tax Law (VATL), deliveries of goods and services to clients residing outside Turkey are exempt from VAT. This exemption aims to support the global competitiveness of Turkish exporters. Furthermore, exporters are entitled to receive a VAT Refund (KDV İadesi) from the state for the VAT they paid while manufacturing or purchasing their export items.

1. Qualification Criteria for Goods and Services Exports

To claim the VAT exemption, the transaction must meet the following legal conditions:

  • Goods Exports: The goods must physically exit the customs territory of Turkey, documented by a certified Customs Declaration (Gümrük Beyannamesi).
  • Services Exports: The service must be performed for a non-resident client, the recipient must be located outside Turkey, and the benefit of the service must be consumed abroad. In addition, the service fee must be brought to Turkey in foreign currency.

2. Claiming VAT Refunds: Process and Requirements

When exporters pay VAT on purchase invoices for export goods, they declare this as "Incurred VAT" (Yüklenilen KDV). Since export sales are exempt from VAT, this incurred VAT cannot be recovered through sales deductions, and is instead refunded to the exporter:

  1. Preparing the Certified Report: The refund request is backed by a VAT Refund Certification Report prepared by a Sworn Fiscal Advisor (YMM).
  2. Submitting Documents Online: Uploading the customs declarations, sales invoice lists, and input/output VAT tables to the Internet Tax Office portal.
  3. Refund Approval: Following the tax office review, the refund is either offset against the company's other tax/social security debts or paid in cash to the company's bank account.

For detailed information and legal consultation, you can visit our Tax Law page, or request an appointment via our Contact page.

Frequently Asked Questions on VAT Exemption for Exporters

What is the time limit to request a VAT refund?

VAT refund applications must be submitted by the end of the second calendar year following the year in which the export occurred. After this period, the refund claim is time-barred.

Are service export invoices subject to VAT?

No. If the service is provided to a client abroad, the fee is brought in foreign currency, and the service benefits a non-resident, the invoice is issued with 0% VAT.

What does Incurred VAT mean?

Incurred VAT (yüklenilen KDV) is the tax paid by the exporter on purchase invoices to manufacture or buy the exported goods. It represents the refund value claimed from the government.

Can the VAT refund be received in cash?

Yes. The refund is first offset against outstanding taxes, social security premiums, or customs duties. Any excess amount can be paid in cash directly to your bank account after verification.

What is export-registered delivery (ihraç kayıtlı teslim)?

It is a system enabling manufacturers to supply products to exporters without charging VAT. The manufacturer is exempted from paying this VAT once the exporter exports the goods within 3 months.