Tax Refund In Turkey: All You Need To Know

Tax Refund In Turkey

Exploring the vibrant bazaars and breathtaking landscapes of Turkey can be even more rewarding if you understand the nuances of the Turkish tax refund system, Right? Don’t worry! We’ve got you covered for this!

Whether you’re a tourist seeking a refund on your shopping splurges or a resident navigating tax returns, this guide sheds light on how to reclaim your dues from the Turkish tax system. Let’s unravel the process, making sure you get every lira you’re entitled to.

Let’s dive in!

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What Is The Vat (Kdv) Rate In Turkey?

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The VAT (KDV) rate in Turkey varies depending on the type of goods or services being purchased. As of September 2021, the standard VAT rate in Turkey is 18%. 

However, some goods and services are subject to reduced rates or exemptions. For example, basic foodstuffs, books, and some medical goods and services are subject to a reduced VAT rate of 8%. 

Certain goods and services, such as exports and international transportation, are exempt from VAT. 

It’s important to note that VAT is included in the price of goods and services in Turkey. When you make a purchase, the price you see on the label or the receipt will include VAT. 

If you are eligible for a VAT refund, you can claim back the VAT you paid on your purchases minus any fees charged by the refund service provider.

Who Is Eligible To Get A Vat (Kdv) Refund?

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In Turkey, visitors who are not residents of Turkey and who are leaving the country permanently are generally eligible to get a VAT (KDV) refund. 

This means that if you are a tourist or a foreign national living in Turkey temporarily and leaving the country, you may be eligible for a VAT refund on goods purchased during your stay. 

You need to meet some conditions to be eligible for a VAT refund in Turkey.

These conditions include: You must have a valid passport or travel document showing your entry into Turkey and departure from the country. 

You must have purchased from a VAT-registered business participating in the VAT refund scheme. Look for the “Tax-Free Shopping” sign or ask the shop if they offer VAT refunds. 

The total value of your purchases, including VAT, must be over the minimum amount set by the Turkish government. 

As of September 2021, this minimum amount is 118.15 TRY. You must have the original receipts or invoice.

What Is The Tax Refund System In Turkey?

The standard VAT rate in Turkey is 18%. Turkey will reimburse between 10.5% and 12.5% of the amount you spend on products subject to standard VAT rates during your trip.

How Are Tax-Free Refunds Calculated In Turkey?

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It can be challenging to figure out how much you will be reimbursed in Turkey and other countries that offer tax-free shopping. 

First of all, to find out how much your tax-free refund will be, there are two things you need to know:

  • The VAT rate in Turkey
  • The VAT status of the product you purchased

We will use an example to try to explain how much your tax-free refund will be. Turkey applies an 18% VAT rate to its products. 

In other words, of a 1200 TRY purchase, 183 TRY of that purchase goes towards tax.

Therefore, you should get 183/1200 or 15.3% of your tax-free purchase back; however, it is impossible to recover this entire amount fully.

Another thing you need to know when calculating your tax-free refund in Turkey is that you need to work with an intermediary refund agent to get your tax-free payment. 

Although Planet Payment and Global Blue are the two most popular companies in this regard throughout Europe, other companies may mediate local or smaller tax-free transactions and can vary by country.

The commission these intermediary companies receive may also affect the amount you can get back. 

These companies usually deduct a percentage from the total refund you will receive. The higher the prices of the products you buy, the lower the deduction percentage will be.

Since the commission received by tax-free refund agents can vary from company to company, this page will help you calculate tax-free refunds in Turkey. 

The total amount you receive back will depend on the company, whether you want your refund in cash, and whether the payout credited to your account will be subject to currency conversions.

What Are The Documents Required For The Digital Customs Validation?

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  • Personal Details And Passport: You’ll need to have your passport or other valid travel document with you, as well as your personal information, such as your name, address, and contact information. 
  • Tax Free Form: You must have the Tax Free Form you received from the retailer when you purchased. This form must be fully completed with your details, the retailer’s details, the value of the goods purchased, and the amount of VAT paid. 
  • Purchased Goods: You’ll need to have the goods you purchased with you, as customs officials may ask to see them to verify that they are being taken out of the country. 

You must have all three of these documents with you to complete the digital customs validation process for a VAT (KDV) refund in Turkey. 

Without them, you may not be able to claim your refund. 

Moreover, some retailers may have different procedures for issuing Tax-Free Forms, so it’s always a good idea to check with the retailer before purchasing to ensure you have all the necessary documentation.

How To Get A Tax-free Refund In Turkey?

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The 4 steps necessary in Turkey to get tax back on your shopping:

  1. Choose stores that offer tax-free shopping.
  2. Have the necessary tax-free forms filled out at the store.
  3. Get your tax-free form verified by customs at the airport.
  4. Visit the airport offices of the tax refund company you work with.

Once you have completed these 4 steps, you can receive your tax-free refund from Turkey. 

Thus, you will get the products you bought in Turkey for even less. Let’s take a look at each of these steps more closely.

Choosing A Tax-Free Shop

Generally, when you shop for large, global brands, these brands will have tax-free agreements, and the paperwork should be no problem. 

You should ask whether it is possible to get a VAT refund when you enter the store. 

You can make the process easier by choosing stores with the words “Tax-free” on their showcases.

Completing The Required Tax-free Form At The Store

At this stage, all you have to do is mention that you are a visitor from abroad and would like to benefit from tax-free shopping. 

The store clerk will prepare the necessary documents to be filled out. All you will have to do is sign the documents.

Get Your Form Verified By Customs At The Airport In Turkey

You must have your tax-free form approved by customs before you leave the country. The customs officer may want to check the products you purchased. 

According to tax-free regulations, all products bought in Turkey must remain unused until they leave the country. 

It may take some time to process your tax-free refund at the airport. Therefore, we recommend that you be at the airport a minimum of 1 hour in advance of your usual arrival time.

Visit The Airport Offices Of The Tax Refund Company You Work With

After your tax-free form has been approved, you need to go to the office of the tax refund company you are working with to receive your tax-free refund. 

If you depart from a large airport, you can simply locate their offices via the company’s or the airport’s website.

You must fill out a form stating how you want to receive your tax-free refund payment. 

You can get it refunded to your credit card once you return to your country or ask to receive cash at the airport by paying an extra commission. 

Cash tax-free refunds are not available at all airports. However, if using a heavily trafficked airport in Turkey, you should be able to receive payment in cash.

What Are The Other Things To Know About Tax-free Refunds In Turkey?

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Tax-free refunds are available to people traveling to Turkey for tourist purposes. In other words, if you have a residence permit for the country you are visiting, getting a refund will not be possible.

You need to reach a minimum purchase threshold to get a tax-free refund. You cannot get tax-free reimbursement for expenses below this limit. 

The minimum purchase threshold is calculated per invoice

That is to say, if you make multiple separate purchases below the minimum threshold, even if the total exceeds the minimum threshold, you will not be able to get tax-free compensation.

Refunds for tax-free purchases in Turkey are only valid for VAT. You can also deduct the VAT fees applied to the commission charged by your tax refund company.

Conclusion

As we wrap up our guide to securing a tax refund in Turkey, remember, navigating this process successfully can lead to substantial savings.

This guide aims to empower you, whether you’re shopping in Istanbul’s grand markets or a part of Turkey’s dynamic economy, to understand and utilize the tax refund system to your advantage.

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