Don’t assume, just consult !

As a foreign business owner, one of the most common mistakes you could make about the Turkish tax system is assuming that same rules apply in Turkey as in your home country. Every now and then, we are approached with foreign business owners or financial managers who are asking about how to recover an over-declared or overpaid Turkish tax and we see that the reason for this was that the finance manager assumed that the Turkish VAT mechanism or corporate tax worked in the same manner as that in his/her own country.

Such presumptions will almost always lead to a tax loss somewhere down the road.

Generally speaking, it is true that the Turkish tax system has many similarities to other European tax regimes as well as the US. The VAT is applied as a percentage of the sales price, and you can deduct input VAT from output VAT and only pay the difference. The corporate tax is calculated over pretax profits.

But these are general guidelines that only help you up to a certain point.They are not good for detailed planning and execution. Other factors like timing, declaring and invoicing come into play that have effects on how and when you can deduct VAT and what you cannot deduct from your taxable income.

If you and your accountant do not pre-emptively estimate and plan for all these “other” details, you will definitely end up with tax losses. We at Tax-TR are here to help you with that.