Cost Reflections and VAT in Turkey

According to article 1\1 of the VAT Law,  deliveries of goods and services related to commercial , industrial and professional activities realized in Turkey and importation of all types of goods and services are subject to VAT.

 

In order for transactions to be subject to VAT in Turkey, goods must be present in Turkey at the time of delivery and services must be rendered or benefited in Turkey.

 

Since there’s no services, profit and creation of adding value in the transactions such as cost recharge are not subject to VAT. My opinion is as follow:

 

-If any VAT incurred because of cost, VAT must be calculated over recharged costs;

-If the cost is not subject to VAT or exempted from VAT, cost recharging can be without VAT.

- If the cost is recharged with mark-up, the mark-up amount must be subject to VAT.