The Ministry of Treasury and Finance (Revenue Administration) has abolished the practice of cash VAT refunds for deliveries subject to a discounted rate within the year within the framework of the authority granted to it by the Value Added Tax Law.
The regulation regarding the subject was made in the VAT Implementation General Communiqué No. 54 published in the Official Gazette dated February 27, 2025.
Accordingly, the practice of making VAT refunds for the following transactions in cash within the year in which the transaction was made has been terminated:
- Delivery of residences subject to a discounted rate
- In the list numbered (II) of the annex of the Cabinet Decree No. 2007/13033
o Delivery of tractors, agricultural machinery
o Delivery of some construction machinery
o Delivery of cylinder gas used in homes
o Delivery of electricity to residential and agricultural irrigation subscriber groups
o Goods (foodstuffs) included in the section (A) of the list numbered (I) of the annex of the Cabinet Decree No. 2007/13033
In summary; Businesses that purchase or manufacture commercial products with a high VAT rate and sell them with a lower VAT rate will not be able to receive a cash VAT refund during the year, but will be able to receive a refund as an offset during the year and in cash or offset in the following year. The new regulation entered into force for refund requests to be made as of the beginning of March 2025.
You can access the full text of the amendment published in the Official Gazette from the link below.
For detailed information and professional support during the compliance process, feel free to contact us.
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