On the 1 January 2018, the VAT rules for sales of electronic services to non-VAT registered individuals by electronic service providers who do not have a residence, business place, legal business centre and business centre in Turkey have changed. Non-resident electronic service providers have to declare and pay VAT which is charged on electronic services to non-VAT registered individuals. This change is only applicable to B2C transactions and irrelevant for B2B sales, where a reverse charge mechanism is still applicable. For cross border supplies of electronic services there is no registration threshold and therefore registration obligation arises as of the first revenue.

A specific definition of e-services does not exist and it seems to cover all services provided electronically to individual customers with no VAT-registration in Turkey. Please check the webpage of the Turkish Tax Authority for determination as to whether you as a foreign provider have to register for VAT in Turkey. The probability is rather high if you provide services electronically.

For the Turkish Tax Authority Website click here: >

As from 1 January 2019, foreign companies registered as “Special VAT Registration for Electronic Service Providers” have to declare their sales of electronic services to businesses (B2B). The declaration should be prepared as a list in xml format and uploaded to the system. KDV3LISTE_1.xsd file for the XML structure can be used. The size of one XML file must be up to 10 megabytes. Multiple files can be uploaded if needed.

The following information has to be provided based on information of the Turkish tax authority webpage:
Purchaser-Tax Registration Number
Element name=”tax Registration Number” The tax registration number of the purchaser who is responsible for reverse charge (VAT registered Tax payer or legal entity). If it is a legal entity and hasn’t got a tax registration number it can be zero.

Purchaser- Name and Surname/Trade name (Mandatory)
Element name=”name Surname Trade Name” Name and Surname/Trade name of the purchaser who is responsible for reverse charge (VAT registered Tax payer or legal entity).

Purchaser- Address
Element name=”address” Address of the purchaser who is responsible for reverse charge (VAT registered Tax payer or legal entity).

Currency of Payment (Mandatory)
Element name=”currency of Payment” The currency of payment of e-service which is taxed as a reverse charge.

Price of Service (Mandatory)
Element name=”price of Service” The price of e-service which is taxed as a reverse charge. (TL/Döviz)

Payment Method (Mandatory)
Element name=”payment Method” The payment method of e-service which is taxed as a  reverse charge. (EFT, Credit Card or other)

Issued Invoice- Date (Mandatory)
Element name=”invoice Date” The date of invoice that you issued according to your national rules to your customer who is a VAT registered tax payer or legal entity in Turkey.

Issued Invoice-Number (Mandatory)
Element name=”invoice Number” The number of invoices that you issued according to your national rules to your customer who is a VAT registered tax payer or legal entity in Turkey.

II – Load Lists:
The lists must be submitted in the same period as the VAT return period. The related period is selected from the “Upload List” menu. The prepared lists should be selected with the “Dosyaları Seç” button and uploaded to the system with the “UPLOAD” button.

The next step is the new governmental proposal following France’s suggestion of digital tax.

Turkey’s government has proposed a 7.5% tax on the revenue of certain technological companies like the U.S. companies Facebook, Google, Uber generated in the country. The current draft DST legislation is in some ways similar to France however, there are components that differ from France’s system. The tax should be applied to any company with 750 million euro of worldwide revenue and 20 million Turkish lira of digital revenue in Turkey. It looks just like the beginning and there is more to come in this area.

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