How to get your Turkish VAT back?

Positive biasedness of Turkish VAT in favor of the tax authority makes it difficult to reclaim it back. Indeed, you cannot get VAT credits in cash or offset against tax liabilities unless either your output VAT exceeds your input VAT (VAT credit), or you have performed a VAT-exempt delivery that the tax regime incentivizes. The most common example for a VAT-exempt delivery that enable you to reclaim your VAT credits back is the export of goods or services. So you indeed can reclaim some of your VAT credits if and when you export goods out of Turkey, or render services to foreign taxpayers that fall into the definition of export of services. Both export of goods and services are exempt from VAT for obvious reasons, and any input VAT that you paid for raw materials, production factors and etc. that you have made use of to render these deliveries is refundable.

Having said that, refund of Turkish VAT comes in two forms. In the form of cash, or in the form of offset against tax liabilities. The procedures for an offset refund is nowadays mostly electronic and goes through the bureaucratic machinery swiftly, whereas a cash refund is treated with much more scrutiny due to the fact that it will cause actual fund outflow from the treasury. A cash refund above certain limits requires an attestation by a sworn-in CPA in the form of a tax audit report, which takes time and fees.

It is important to make a plan in advance on how to recover VAT credits before you start a project/ business. Failing to do so will set you back in lost credits and time. We are here to help you so that you lose none of those.