Indirect Tax Alert | 31 January 2018

Turkish Tax Authority publishes VAT guidance for nonresidents providing E-services to Turkish resident individuals

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Executive summary

The Value Added Tax (VAT) liability of nonresidents providing electronic services (E-services) to Turkish resident individuals who are not VAT-registered in Turkey, is effective as of 1 January 2018.

On 31 January 2018, the Turkish Revenue Administration issued a Communiqué regarding this tax liability. The Communiqué provides a transition period for the first tax return and accordingly the VAT on the E-services provided during January, February and March 2018 must be declared by 24 April 2018. The corresponding VAT must be paid by 26 April 2018.

Detailed discussion


As previously communicated, Law No. 70611 introduced a provision to amend the VAT Law.

According to that provision, persons (real and legal) that have no residence, workplace, registered head office or business center in Turkey (nonresidents) are required to declare and pay VAT due on E-services provided to the Turkish resident individuals who are not VAT-registered. This provision also provides that the Ministry of Finance is authorized to determine the scope of E-services together with the procedures and principles of the VAT application.

The Ministry of Finance, Revenue Administration published this Communiqué in the Official Gazette on 31 January 2018.

Procedures and principles covered in the Communiqué are effective retrospectively as of 1 January 2018.

VAT registration

The Communiqué provides that nonresidents who provide E-services to Turkish resident individuals who are not VAT-registered in Turkey should declare the VAT by registering as “Special VAT Liability for Electronic Service Providers.”

There is no threshold for VAT registration.

These nonresidents must declare the VAT calculated on their services with VAT Return No.3 by filing online.

For the VAT registration, nonresident E-service providers are required to fill in and submit a form online that will be available at, prior to the due date for submission of their first VAT Return No.3.

Following the approval of the form, VAT registration will be completed and the taxpayer will be provided with a username and password.

VAT declaration and payment

The VAT will be declared:

  • Online via the electronic tax office by filing the VAT Return No.3
  • In Turkish Liras
  • By the 24th day of the month following the VAT period (the VAT period is monthly in a calendar year)

It is important to note that the VAT liability of nonresidents is effective as of 1 January 2018.

The Communiqué provides a transition period for the first tax return and states that the VAT on the E-services provided during January, February and March 2018 must be declared by 24 April.

The VAT must be paid by the 26th day of the month that the VAT is declared.

Payments can be made to the tax offices, authorized banks and through the website ( of the Turkish Revenue Administration by using the debit or credit cards of authorized banks.

If the service fee is in foreign currency, the currency will be converted to Turkish Lira over the buying exchange rate (Turkish Central Bank rate published in the Official Gazette) of the day in which the event giving rise to VAT takes place.

Parties who are responsible to declare and pay the VAT if the service provider is unknown

If the E-service provider is not explicitly stated and this situation is not reflected in the service agreement between the parties and information about the E-service or service provider is not explicitly provided on the invoices or related documents, the VAT-related services provided electronically shall be declared and paid by the intermediaries.

On the other hand, those who have the authority to request payment from the customer, determine the general conditions for the service in question, or have the obligation to perform the service are considered E-service providers.

Non-requirements for nonresident electronic service providers registered as Special VAT Liable

Nonresident E-service providers registered as special VAT payers are not required to submit a VAT return for periods where there has been no transaction.

In addition:

  • They do not have bookkeeping obligations.
  • They are not obliged to have the CPA’s signatures on the VAT returns.
  • They are not obliged to submit a declaration for starting their work.

Input VAT deduction mechanism

The Communiqué allows the VAT deduction mechanism for E-service providers who have Special VAT Liability in Turkey. Therefore, on the condition that the services are related to VAT declaration within the scope of the Special VAT Liability, the VAT paid (input VAT) in Turkey by the nonresidents for the purchase of goods or services from persons who have VAT liability in Turkey, the portion of the VAT corresponding to these services can be deducted.


The Communiqué states that nonresident E-service providers who do not comply with the requirements stipulated by the Communiqué will be subject to tax penalties that are regulated by the Turkish Tax Procedural Code No. 213.


The scope of the E-services are not explicitly stated in the Communiqué. Thus, it is understood that all the services provided electronically and through online means would fall under the scope of E-services.

It is still not clarified how E-service providers are to determine the tax status of the Turkish resident individuals (whether they are VAT-registered in Turkey).


1. See EY Global Tax Alert, Turkey enacts new Law to increase revenues, dated 5 December 2017.

For additional information with respect to this Alert, please contact the following:

Kuzey Yeminli Mali Müşavirlik A.Ş. Istanbul, Turkey
  • Ateş Konca
  • Gamze Durgun

EYG no. 00585-181Gbl