In Turkey, the Value Added Tax (VAT) Law entered into force on January 1st, 1985. By the VAT Law, some indirect taxes on consumption were abolished.
Turkish taxation system levies value added tax on the supply and the importation of goods and services. Liability for VAT arises;
(a) When a person or entity performs commercial, industrial, agricultural or independent professional activities within Turkey,
(b) When goods or services are imported to Turkey.
VAT is levied at each stage of the production and the distribution process.
However;
liability for the tax levies on the person who supplies or imports goods or services, the real VAT burden is on the final consumer. This result is achieved by a tax-credit method where the computation of the VAT liability is based on the difference between the VAT liability of a person on his sales (output VAT) and the amount of VAT that he has already paid on his purchases (input VAT). The Turkish VAT system employs multiple rates and the Council of Ministers is authorized to change the VAT rates within certain limits.
Source: Revenue Administration
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