VAT, called KDV in Türkiye, affects the first invoice, import declaration and bookkeeping cycle of a Turkish company. The practical starting point is to identify the taxable activity and keep the company’s invoices and purchase evidence aligned from day one. This guide covers registration, rates and the controls foreign founders need in 2026.
What does Turkish KDV apply to?
Article 1 of the Turkish VAT Law covers commercial, industrial, agricultural and professional supplies made in Türkiye, as well as imports. The legal scope comes first; an invoice format or a customer’s location does not by itself settle the result. Check the exact transaction, place-of-supply rule and any exemption before pricing a deal.
The operative text is VAT Law No. 3065. Cross-border work deserves a separate review because export, service-export and reverse-charge questions turn on facts that a short rate table cannot answer.
Does a new Turkish company need KDV registration?
A company that carries on taxable activity should arrange its tax registration and VAT reporting position as part of its establishment and accounting setup. There is no safe shortcut in waiting until the first large invoice. The right sequence is activity review, tax-office registration, invoice capability and a monthly reporting calendar.
For the recurring operational file, see Corpenza’s guide to accounting and bookkeeping obligations for Turkish companies. The Revenue Administration’s Digital Tax Office is an official access point, but the filing channel and authorization should be confirmed with the company’s accountant.
Which KDV rate applies in 2026?
The general rate commonly used for taxable supplies is 20%. Reduced rates of 10% and 1% apply only to listed supplies and conditions; they are not a founder’s elective choice. The 2023 Presidential Decision No. 7346 changed the main rate structure, effective 10 July 2023. Verify the current schedule and product classification before quoting a VAT-inclusive price.
| Rate | Operational point |
|---|---|
| 20% | General taxable rate unless a legal reduced-rate or exemption rule applies. |
| 10% | Applies only to designated goods and services. |
| 1% | Applies only in narrower listed cases and conditions. |
Use the official text of Decision No. 7346 as the rate-change source, then obtain transaction-specific confirmation before issuing invoices or signing a gross-price contract.
Can a company offset input KDV?
Article 29 allows a taxpayer, subject to the law’s conditions, to deduct VAT shown on invoices and similar documents for purchases connected with taxable activity from VAT calculated on its own taxable supplies. The evidence trail matters. A payment record alone does not replace a compliant invoice, and private or unrelated spending creates risk.
Keep supplier invoices, import records, contracts and payment evidence together. A clean file also makes reconciliations faster when management reviews cash flow or an advisor performs a compliance check.
What should foreign founders do before the first invoice?
Set the commercial model before the invoice template is activated. Confirm whether the customer is in Türkiye, whether the supply is a good or service, whether an exemption is available, and whether the quoted price is net or VAT-inclusive. Then make the accountant, sales team and operations team use the same answer.
- Document the activity and expected invoice flows.
- Map the applicable rate or exemption for each revenue line.
- Set an approval step for supplier invoices and import documents.
- Reconcile VAT accounts monthly, before a deadline becomes urgent.
Corpenza can coordinate the company-formation and tax-optimization support around the operating model. Tax outcomes remain dependent on the facts, documents and decisions of the competent authorities.
FAQ: Turkish KDV registration and rates
Is every Turkish company charged 20% KDV?
No. Twenty percent is the general rate, while reduced rates and exemptions depend on the legal classification of the supply. Review the item or service and the current official lists before billing.
Can a foreign shareholder recover input VAT automatically?
No. Input-VAT deduction follows the Turkish company’s taxable activity and documentary conditions. Ownership nationality does not create an automatic recovery right.
Is KDV the same as corporate income tax?
No. KDV is transaction-based indirect tax. Corporate income tax concerns the company’s taxable profit and follows a different calculation and filing process.
When should the rate be confirmed?
Confirm it before the first invoice, import declaration or VAT-inclusive quotation. Correcting a rate after a contract is signed can create margin and customer-collection problems.
This is general information, not legal or tax advice. Rules change and the correct treatment depends on the transaction.
