The section in the VAT General Implementation Communiqué that explains in which cases the VAT exemption can be applied in scrap sales is given below.
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Deliveries of Precious Metals, Precious Stones, Precious Papers, Money, Foreign Exchange, Securities, Stamp Duty and Scrap and Waste
Deliveries of Precious Metals, Precious Papers, Money, Foreign Exchange, Securities
According to Article (17/4-g) of Law No. 3065, gold bullion, silver bullion, foreign exchange, money, valuable papers, stocks, bonds (including financial services provided by purchasing bonds, limited to the interest income obtained), lease certificates issued by asset leasing companies, and capital market instruments traded on stock exchanges established in Turkey are exempted from VAT.
Deliveries of gold bullion, silver bullion, foreign exchange, and money are exempt from VAT, and deliveries of stocks and bonds (including financial services provided by purchasing bonds, limited to the interest income earned)*, as well as deliveries of valuable documents that yield interest or dividends, such as profit sharing certificates and income sharing certificates, are also exempt from tax. However, in deliveries of gold and silver coins and goods made of gold and silver, VAT is calculated on the amount after deducting the price corresponding to the bullion amount, as explained in section (III/A-4.2.) of the Communiqué.
In addition, valuable papers regulated in the Valuable Papers Law No. 2106 have been included in the scope of the exemption with the article. Accordingly, VAT is not applied to deliveries of valuable papers included in the table annexed to Law No. 210.
With Law No. 6728, the parenthetical provision “(including financial services provided by purchasing bonds, limited to the interest income obtained)” was added after the phrase “bond” in Article (17/4-g) of Law No. 3065. Within this framework, it has been clarified that the financial service provided by purchasing bonds, limited to the interest income obtained, is within the scope of the exemption.
Accordingly, in the bond issuance, the interest/coupon payments in return for the financial service provided by the purchasers of the bond together with the delivery of the bond are also within the scope of the exemption.
Example: Company (A), resident in Turkey, issued bonds abroad to meet its funding needs, and from among the issued bonds, a bond with a nominal value of 100,000 TL was purchased by Company (B), resident abroad. In the redemption of the bond, Company (A) paid Company (B), resident abroad, a nominal value of 100,000 TL and an interest of 10,000 TL calculated on this amount. Since this interest payment is exempt from VAT according to Article (17/4-g) of Law No. 3065, Company (A) will not declare VAT on the interest amount it paid as the responsible party.
Delivery of Metal, Plastic, Paper, Glass Scrap and Waste and Garment Scraps
****VAT is not applied to the deliveries of scrap or waste metal, plastic, paper and glass and garment scraps.
The delivery of metal scraps, waste and shavings obtained during manufacturing in workshops or factories is also exempt from tax within this scope.
However, domestic deliveries and imports of ingots obtained from scrap metal are not considered within the scope of the exemption.
Source: Revenue Administration
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