IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 01 Apr 2017 | Removal date: open ended
Still in force

FDI: Financial incentive

In Official Gazette number 30057 of 5 May 2017, the government of Turkey published a Communiqué concerning the Turkish General Value Added Tax Application. This highlighted Communiqué entered into force on 1 April 2017 and established that foreigners purchasing assets aimed to serve as office or residence premises are now for the first time exempted from their VAT obligations. The highlighted VAT exemptions only apply when the purchased real estate is held for a minimum period of one year and its original purchase transaction was executed using foreign currency exclusively. 

Furthermore, according to the highlighted  Communiqué, foreign parties in order to be able to benefit from this VAT exemption, must now for the first time ensure that they pay minimum 50% of the financial value of the real estate before the date the acquisition invoice is issued (while the remaining percent of the investment needs to be paid by the end of the year).

Lastly, the Communiqué denoted that the following foreign  parties are eligible to apply for the highlighted VAT exemptions:

  • Individuals holding Turkish citizenship and living abroad for more than six months;
  • Foreigners who are not residing in Turkey;
  • Legal entities which offices and headquarters are registered outside Turkey.

Previously, foreigners for purchases of this nature were subjected to Value Added Tax (VAT) obligations ranging from 1% to 8% ( as 1% to 8% are the general VAT obligations applicable within the Turkish jurisdiction for purchases of estates for residence or office purposes).

AFFECTED COUNTRIES

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