VAT refunds: who can claim and how the process works
Refunds of accumulated VAT from exports, withholding sales and reduced-rate supplies; offset and cash refunds, sworn accountant reports, guarantees and timing.
In the VAT system, the seller deducts VAT paid from VAT charged. In some transactions little or no VAT is charged on sales, so VAT paid on purchases cannot be deducted and VAT carried forward accumulates. The law allows a refund of this amount for certain transactions.
Main transactions giving a refund right
| Transaction | Why a refund arises |
|---|---|
| Exports of goods and services (VAT 11/1-a) | Exports are exempt; VAT incurred is refunded |
| Sales for export (11/1-c) | VAT-free sales to the exporter |
| Withholding transactions | Part of the VAT is paid by the buyer; the seller receives less VAT. Withholding rates |
| Reduced-rate supplies (1%, 10%) | Low rate on sales, high rate on purchases; the amount above a set annual limit |
| Diplomatic, investment incentive and other exemptions | Exemptions listed in the law |
How to get a refund
- Declare: the transaction is entered in the relevant table of that month's VAT return.
- Request: a refund request via the online tax office with that or a later return; attach sales and purchase invoice lists, customs declarations etc.
- Choose:
- Offset refund: the amount is offset against other tax debts (including SGK premiums). Below a set amount, no report or guarantee is required.
- Cash refund: paid to the bank account. Above certain limits, a sworn accountant report, tax audit report or guarantee is required.
- KDVİRA check: the Revenue Administration's system checks suppliers' filings and risk status. If there is a negative finding, the refund is stopped or a guarantee is requested.
- Result: for complete applications an offset takes a few weeks; a cash refund may take several months depending on documents and reports.
Common mistakes
- Recording purchase invoices in the right period: VAT on late-recorded invoices causes problems in the refund calculation.
- Fake or risky suppliers: a supplier found to issue fake invoices can stop the whole refund. Know your suppliers.
- Overhead allocation: in calculating VAT incurred, overheads must be allocated between refundable and other transactions.
- Exchange rate and dates for exports: consistency of invoice and customs declaration dates and rates.
Is claiming a refund always best?
Paying SGK and tax debts by offset is very useful for cash planning. But for small amounts the cost of a report may exceed the refund; letting the VAT carry forward may then be wiser. We decide together based on the amount, timing and cash needs. VAT calculator · Returns