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Services provided to customers abroad are exempt from VAT

MuhasebeNews — Wed, 23 Oct 2024 13:31:47 +0000

2. Export of Services

According to Article (11/1-a) of Law No. 3065, services provided for customers abroad are exempt from tax.

2.1. Scope of Exemption

In order for a service to be exempt from VAT within the scope of Article (11/1-a) of Law No. 3065, according to Article (12/2) of the same Law;
– The service must be provided for a customer abroad,
– The service must be utilized abroad,

The fact that the service is provided for a customer abroad is documented with an invoice or similar document issued in the name of the customer abroad.

The purpose of using the service abroad is that the service provided in Turkey for the customer abroad is related to the customer’s business, transactions and activities abroad; it is not related to their activities in Turkey.

Since the goods and services that companies abroad will send to Turkey are consumed in Turkey, consultancy, brokerage, supervision, customer finding, market research, etc. services provided to these companies in Turkey for the goods and services in question are not considered within the scope of service export exemption and are subject to VAT. In this case, in determining the benefit criterion, the service provided must be directly related to the imported goods.

Services provided for goods imported by foreign companies from Turkey (exported by Turkey) are considered within the scope of service export.

Modification, maintenance, and repair services provided to foreign-flagged ships and aircraft that do not have the right to transport within Turkey are exempt from VAT within the scope of service export.

Services provided from Turkey to free zones are not considered within the scope of service export.

2.2. Documentation and Declaration of Exemption

The exception regarding service export is documented with a service invoice issued to the customer abroad. A list showing photocopies or printouts of service invoices approved by company officials is provided. These documents must be submitted as an attachment to a petition within the declaration period in the period in which the exemption is declared. It is not mandatory to provide the payment document for the service (a document proving that the amount was brought to Turkey, bank receipt, etc.) for the declaration of the exemption.

The export exemption is declared with the VAT Declaration No. 1 for the taxation period in which the service was performed. The declaration is made by using the transaction type line number 302 in the “Transactions Included in the Scope of Full Exemption” table in the “Exemptions-Other Transactions Giving Right to Refund” tab of the declaration for the period in which the service performed for the customer abroad was completed/performed.

The service fee is entered in the “Delivery and Service Amount” column of this line. The VAT amount calculated by taking into account the explanations in Section (IV/A) of the Communiqué, which is included in this service, is written in the “Incurred VAT” column. If no refund is requested, “0” is written in the “Incurred VAT” field.

The refund of VAT incurred for transactions declared in this manner and not compensated through deduction is not fulfilled before the service fee arrives in Turkey in foreign currency. However, in service exports shown in Turkish Lira on the invoice, refunds can also be made based on documents proving that the fee was brought to Turkey in Turkish Lira.10

However, in modification, maintenance and repair services of foreign flagged ships that do not have the right to transport within Turkey, 50% of the VAT incurred due to the service within the scope of the exception and not compensated through deduction is refunded without the need for a document proving that the service fee was brought to Turkey. The remaining portion of the VAT to be refunded is refunded at the rate that half of the transaction fee was brought to Turkey.

2.3. Refund

The following documents are required for refund requests arising from service export:
– Standard refund request petition
– Service invoice or list
– Payment document (a document proving that the price was brought to Turkey, bank receipt, etc.)
– List of VAT to be deducted for the period in which the service export was declared
– List of VAT incurred
– Calculation Table of VAT Requested to be Refunded

2.3.1. Refund by Setoff

Taxpayers’ refund requests arising from service export and not exceeding 10,000 TL are fulfilled without requiring an inspection report, Certified Public Accountant report, or collateral. If the refund request exceeds 10,000 TL, the refund of the exceeding part is fulfilled according to the tax inspection report or Certified Public Accountant certification report. If a collateral is provided, the taxpayer’s refund request is fulfilled and the collateral is resolved according to the results of the tax inspection report or Certified Public Accountant report.

2.3.2. Cash Refund

Regardless of the amount, taxpayers’ cash refund requests arising from service exports are fulfilled according to the tax audit report or CPA report13. If a guarantee is given, the taxpayer’s refund request is fulfilled and the guarantee is resolved according to the results of the tax audit report or CPA report.

Source:https://www.gib.gov.tr/fileadmin/mevzuatek/kdvgeneluygulamatebligi/kdvgeneluygulamatebligi_2a.pdf
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

How to reflect the amount on the self-employment receipt to another commercial company?

MuhasebeNews — Wed, 23 Oct 2024 13:29:36 +0000

Example

1) e-SMM

Gross: 1,000 TL

Withholding Tax 20%: 200 TL

Net: 800 TL

VAT 20%: 200 TL

Amount to be Collected: 1,000 TL

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2) Sales invoice in the nature of a reflection invoice to be issued to another company

Base: 1,000 TL

VAT 20%: 200 TL

Grand Total: 1,200 TL

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Do those who voluntarily switch to e-Invoice have to switch to e-Ledger?

MuhasebeNews — Wed, 23 Oct 2024 13:16:39 +0000

If you do not meet the conditions in the circulars that impose the e-Ledger application, you are not required to apply for e-Ledger.

Optionally switching to e-Invoice does not impose the obligation to switch to e-Ledger.

Source: e-Fatura forum – https://forum.efatura.gov.tr/view.php?id=31365
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

To whom can a CPA in Türkiye deliver documents belonging to a client he cannot reach?

MuhasebeNews — Wed, 23 Oct 2024 13:04:20 +0000

REGULATION ON WORKING RULES AND PRINCIPLES OF CERTIFIED PUBLIC ACCOUNTANTS AND CERTIFIED PUBLIC ACCOUNTANTS (1)

…

Termination of Contract

Article 26 – (Amended:O.G-21/11/2007-26707)

The parties may terminate the contract between themselves at any time for justified reasons or with their mutual consent.

In this case, the books and documents received shall be returned to their owners within one month by preparing a handover report. If the handover does not take place, the situation shall be notified to the chamber by the professional.

The parties’ rights to compensation are subject to general law rules.

Failure to pay the fee and the documents entrusted to the professional are not reliable and sound are the professional’s legitimate grounds for termination.

Storage and Return of Books and Documents

Article 27 – Professionals are obliged to preserve the books and documents entrusted to them in good faith for the period required by their work and to return them at the end of the work. However, in cases where the return of books and documents is notified to the owner in writing, the storage obligation ends within one month from the date of notification. Books and documents not received by their owners within one month from the end of the work are delivered to the tax office to which the relevant parties are affiliated with a letter.

Is income tax deducted from wage advances?

MuhasebeNews — Wed, 23 Oct 2024 13:02:37 +0000

Only stamp duty is deducted from payments made during the month as advance payment.

In addition, taking into account all criteria such as the job description of the employee to whom the advance payment is made, transactions that harm the company and create treasury losses should also be evaluated in terms of hidden profit distribution through transfer pricing and in accordance with other laws.

Source: Istanbul Chamber of Certified Public Accountants
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Will the amounts be included in the balance sheet and income statement in the corporate tax return at the end of liquidation?

MuhasebeNews — Wed, 23 Oct 2024 12:59:36 +0000

At the end of the liquidation, the income statement and balance sheet showing the liquidation profit or loss will be given in the balance sheet and income statement attached to the corporate tax return to be submitted to the tax office.

The financial statements will show the financial status before the final closing item is made.

After the final closing record is made at the end of the liquidation, an ASSET and PASSIVE NO notification will be given to the trade registry office.

***
Explanations in the General Application Communiqué of the Corporate Tax Law regarding the entry into liquidation and the liquidation process;

…

17. Liquidation

17.1. Liquidation period

For whatever reason, the liquidation period will be valid instead of the accounting period in the taxation of institutions that enter into liquidation.

Liquidation begins on the date on which the general assembly decision regarding the institution entering into liquidation is registered and ends on the date on which the liquidation decision is registered.

The period from the start date to the end of the same calendar year and for each calendar year after this period and the period in which the liquidation ends, the period from the beginning of the relevant calendar year to the end date of the liquidation is considered an independent liquidation period.

If the liquidation ends within the same calendar year, the liquidation period will start on the date the institution enters liquidation and will continue until the date the liquidation ends.

Example 1:

If the liquidation is concluded within the same year:

Date the institution entered into liquidation: 18/1/2006

End date of liquidation: 12/12/2006

Liquidation period: 18/1/2006-12/12/2006

Example 2:

If the liquidation continues for more than one year:

Date the institution entered into liquidation: 15/4/2006

End date of liquidation: 4/6/2008

I.Liquidation period: 15/4/2006-31/12/2006

II.Liquidation period: 1/1/2007-31/12/2007

III. Liquidation period: 1/1/2008-4/6/2008

If a non-partner is appointed as liquidation manager, will he/she be paid wage?

MuhasebeNews — Wed, 23 Oct 2024 12:58:02 +0000

A payroll will be prepared for the wage to be paid to the person who will be appointed as liquidator/manager from among the partners, and taxes and social security premiums will be paid.

On what amount will depreciation be calculated in 2024/Q3 provisional tax?

MuhasebeNews — Mon, 21 Oct 2024 08:44:42 +0000

Those who make inflation adjustments in the 2024/2nd period provisional tax period will calculate their depreciation calculations dated 30.09.2024 based on the new value of the fixed assets dated 30.06.2024.

Will there be a 70% – 30% expense restriction on the expenses of light commercial vehicles that are registered as pickup trucks?

MuhasebeNews — Mon, 21 Oct 2024 08:43:24 +0000

Vehicles of different brands such as Doblo, Fiorino, Berlingo, Kangoo, Transit, Combo, with a passenger seat in the back are considered as passenger cars in terms of tax application even if they are listed as pickup trucks on the license. Therefore, they should be considered as passenger cars in their purchase, use and sale.

In general, vehicles are considered as passenger cars defined in Customs G.T.I.P. 87.03 position and are subject to expense restrictions, while they are considered as commercial vehicles in G.T.I.P. 87.04 position and all expenses are taken into account as expenses in determining the tax base.

How is VAT Withholding Applied to Cleaning, Environmental and Garden Maintenance Services in Türkiye?

MuhasebeNews — Mon, 21 Oct 2024 08:24:11 +0000

VAT LAW GENERAL APPLICATION NOTIFICATION
2.1.3.2.10. Cleaning, Environmental and Garden Maintenance Services
2.1.3.2.10.1. Buyers to Apply Withholding and Withholding Rate

In the purchases of cleaning, environmental and garden maintenance services specified in the section (I/C-2.1.3.1/a and b) of the Notification, VAT withholding at the rate of (9/10) is applied by the buyers.

2.1.3.2.10.2. Scope

Common services provided by the cleaning services sector;
– Building cleaning,
– Street cleaning,
– Hygienic cleaning of health institutions and collection and disposal of hospital waste,
– Garbage collection and disposal of collected garbage,
– Cleaning of parks and gardens and cemeteries,
– Pest control,
– Cleaning of railway and land transport vehicles,

and similar works are within the scope of withholding application.

Building cleaning includes cleaning of the interior and exterior of buildings, including their annexes and extensions, and cleaning of all kinds of furnishings (carpet, curtain, armchair, ornaments, etc.) inside or outside the building.

In addition, cleaning or washing of items such as towels, sheets, clothes, underwear is also subject to withholding within the scope of cleaning services.

However, withholding is not applied during the purchase of tools, equipment and consumables such as detergents and brooms to be used in cleaning works.

The services procured by those who are appointed as responsible for the maintenance, planting, irrigation, pest control, collection and rehabilitation of stray animals and similar services of parks, gardens and cemeteries, boulevards, median strips, recreational areas and pools are subject to withholding within the scope of environmental and garden maintenance services.

Source: VAT LAW GENERAL APPLICATION NOTIFICATION https://www.gib.gov.tr/fileadmin/mevzuatek/kdvgeneluygulamatebligi/kdvgeneluygulamatebligi_1c.pdf
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.