According to the Article 13(i) of the Law on Value Added Tax dated 25 October 1984 and numbered 3065, certain foreigners are exempted from the value added tax (“VAT”) in transactions with regard to the first sale of new buildings that built as residence or workplace.
Scope of the Exemption
The following persons may benefit from the exemption:
- Foreign natural persons who are not resident in Turkey.
- Corporations having legal and business centers abroad and do not generate income from sources within Turkey through a workplace or permanent representative
- Turkish citizens living abroad for more than six months with work permit or residence permit.
Conditions of the Exemption
- At least 50% of the purchase price must be brought to Turkey in foreign currency before the invoice related to the sale is issued, and the remaining amount must be brought as foreign currency within one year.
- In case where the foreign currency is transferred to a bank in Turkey, the bank transfer shall be proven through a bank receipt. If the amount is transferred by physical means, a document proving such transfer must be obtained from the customs bureau.
- The residential or commercial property for which the exemption was received must be kept at least for one year.
Conclusion
Foreign persons are exempted from the VAT subject to the above mentioned and other certain conditions.
For more information, you may contact with AYS Law Firm.