Turkey VAT (KDV) Guide 2026

Standard Rate — 18%

The standard KDV rate is 18% and applies to most goods and services not covered by reduced or exempt categories. This includes electronics, vehicles, alcoholic beverages, tobacco products, cosmetics, household appliances, and most professional services. The rate is applied to the VAT-exclusive price of the supply. Businesses charge output VAT on their sales and can recover input VAT on their purchases, with the net difference remitted to the tax office monthly.

Reduced Rates — 8% and 1%

8% rate (reduced): Applies to many essential goods and services, including:

• Food products (basic food items, bread, milk, eggs, meat, vegetables)
• Textiles and clothing
• Furniture
• Books, newspapers, and magazines
• Accommodation services (hotel stays, etc.)
• Passenger transport (domestic flights, intercity bus)
• Certain medical devices and pharmaceutical products
• Educational services
• Cinema, theatre, and museum tickets

1% rate (basic necessities): Applies to essential goods, including:

• Cereal grains (wheat, barley, corn, rice, etc.)
• Legumes and pulses
• Fresh fruits and vegetables (unprocessed)
• Animal feed and seeds
• Newspapers (specific types)
• Residential property deliveries (sqm thresholds apply with reduced rates down to 1%)
• Social housing and certain real estate transactions

Zero-Rated and Exempt Supplies

Zero-rated (0% KDV): Exports of goods and services, international transport, and supplies to free zones are zero-rated. The supplier can still claim input VAT credits and obtain refunds for excess input VAT. Turkish exporters typically apply for VAT refund on their export transactions.

VAT exemptions: Certain supplies are exempt without input VAT recovery:

• Financial and insurance services (banking, insurance, factoring)
• Leasing of residential properties (long-term residential leases)
• Education and healthcare services provided by public institutions
• Certain cultural and sporting activities
• Supply of goods and services to diplomatic missions and international organisations (subject to reciprocity)

Registration Threshold

Businesses whose annual turnover exceeds TRY 250,000 (2026 estimated threshold, indexed annually) or those that import goods must register for KDV. Registration is also mandatory for businesses that voluntarily choose to register, even if below the threshold. VAT returns are filed monthly (or quarterly in some cases), due on the 26th day of the following month. Newly established businesses must register within 10 days of their establishment or commencement of commercial activity.

E-Invoice (e-Fatura) and E-Archive (e-Arşiv)

e-Fatura: Mandatory for all businesses exceeding certain turnover thresholds (currently TRY 5 million in gross revenue). E-Fatura invoices must be submitted through the GİB's central e-invoice portal or via private integrators. Invoices are transmitted electronically in XML (UBL-TR) format, replacing paper invoices. The system covers B2B transactions primarily.

e-Arşiv (E-Archive): Mandatory for B2C transactions that exceed TRY 30,000 per invoice. E-Archive invoices are stored electronically but can be printed and delivered to the customer. The system also applies to all e-invoice users' B2C transactions above certain limits.

e-Defter (Ledger): Businesses registered for e-Fatura must also maintain their books electronically through the e-Defter system, submitting journal ledgers (yevmiye defteri) and general ledgers (defteri kebir) in electronic format.

Penalties: Failure to issue e-Fatura or e-Arşiv invoices can result in tax loss penalties (vergi ziyaı cezası) of up to 100% of the invoiced amount plus special irregularity penalties (özel usulsüzlük cezası) of up to TRY 100,000 per occurrence.

KDV Refunds

Excess input VAT (where input VAT > output VAT) can be carried forward or refunded. Exporters, businesses with zero-rated supplies, and certain investors in incentive-certificated projects may claim refunds more readily. The refund process involves a tax audit or review by the tax office, and supporting documentation must be maintained. Refund applications are filed through the e-VDO (electronic tax office) system. Refunds typically take 2–6 months depending on the taxpayer's compliance history.

FAQs

Is KDV included in listed prices in Turkey?

Yes, in B2C retail transactions, the listed price is KDV-inclusive. For B2B transactions, prices are typically quoted exclusive of KDV and the tax is added separately.

Can foreign businesses register for Turkish KDV?

Yes, foreign businesses providing digital services or other taxable supplies to Turkish consumers must register for KDV if they exceed the threshold. A tax representative may be required.

What are e-Fatura penalties?

Special irregularity penalties for non-compliance with e-Fatura requirements range from TRY 1,000 to TRY 100,000 per document depending on the infraction and taxpayer category.

Can I claim KDV refund as a tourist?

Yes, Turkey operates a Tax Free shopping system for tourists. Non-resident visitors can claim a refund of KDV paid on purchases exceeding TRY 100 at participating stores. The refund is processed at customs upon departure.

Disclaimer

This guide provides general information about Turkish KDV for the 2026 tax year. Thresholds and rates are estimated based on the most recent published data and annual revaluation. Tax laws may change. Always consult with a qualified Turkish tax advisor or GİB for advice specific to your situation. InvestmentKit does not provide tax advice.