- Real persons and legal entities that are exempt from VAT
Turkish citizens living abroad for more than six months with a work or residence permit, foreign real persons who do not reside in Turkey, and legal entities that do not have their registered office in Turkey and do not generate income through a workplace or a permanent representative in Turkey are subject to the exemption.
- Real estates subject to VAT exemption
In terms of the real estates within the scope of the exemption, the Law uses the expression “first delivery of buildings constructed as residence or workplace”. Accordingly, it is concluded that the real estates within the scope of the exemption are “first-hand” residences or workplaces. Acquisition of lands, plots, and buildings, which are in the construction progress and buildings that have been completed but for which a building license has not yet been obtained are not subject to the VAT exemption under this Law.
- Other conditions
For the above-mentioned real estates to be subject to VAT exemption, the sales price shall be brought to Turkey in foreign currency and the real estate shall not be transferred for three years.
Taxpayers may apply in writing to the relevant tax office by providing the necessary documents for the transactions considered to be within the scope of the exemption. If it is determined that the exemption had been applied without the exemption conditions being met, the taxpayer and the buyer shall be jointly and severally liable for the tax which has not been collected back then, tax loss penalty, and default interest. If the residence or workplace within the scope of the exemption is transferred within three years, the tax which has not been collected back then shall be paid with interest by the transferor before the title deed transaction.
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