What is KDV (Turkish VAT)?
KDV (Katma Değer Vergisi) is Türkiye’s value-added tax under Law No. 3065: a consumption tax charged at every stage of the supply chain on the value added, with input VAT credited against output VAT so the economic burden falls on the final consumer. Any business making taxable supplies in Türkiye must register, charge KDV on invoices and file monthly returns.
Current rates
Three rates apply: 20% standard (most goods and services, including software licences and professional services), 10% reduced (many foodstuffs, accommodation and certain services) and 1% super-reduced (basics such as bulk agricultural staples and specific housing). The standard rate has been 20% since July 2023; rates are set by Presidential decision and can change.
What tech companies most often get wrong
Exported services: services performed in Türkiye for a customer abroad and used abroad are KDV-exempt as service exports (Art. 11-12) — the classic basis on which Turkish SaaS and dev shops invoice foreign clients KDV-free, provided the invoice is issued to the foreign customer and payment comes to Türkiye. Reverse charge: when a Turkish company buys services from abroad (cloud, licences, marketing), it must self-assess KDV via VAT return no. 2 — a frequent diligence finding. Partial withholding (tevkifat): certain domestic services (e.g. workforce supply, some consultancy to designated buyers) require the customer to withhold part of the KDV.
Do foreign SaaS providers owe Turkish KDV?
Yes — non-resident providers of electronic services to Turkish consumers must register under the special scheme (VAT return no. 3) and charge 20% KDV.
Can accumulated input KDV be refunded?
Generally it carries forward indefinitely; cash refunds are limited to defined cases such as exports and reduced-rate supplies, subject to certification.