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Rates of Value Added Tax on Goods and Services Have Been Increased

Rates of Value Added Tax on Goods and Services Have Been Increased

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On July 7, 2023, Value Added Tax ("VAT") rates have been significantly increased with the Amendment Decree ("Amendment Decree") to the Decree on Determination of Value Added Tax Rates Applicable to Goods and Services numbered 7346 ("Decree") published in the Official Gazette dated July 7, 2023 and numbered 32241.

Accordingly;

The general VAT rate for taxable services specified in paragraph a of the Decree has been increased from 18% to 20%,
The VAT rate for taxable goods and services specified in paragraph c of the Decree has been increased from 8% to 10%,
Whereas the goods in the nature of soap, shampoo, detergent, disinfectants, wet wipes, toilet paper, paper towels, tissues and napkins, regardless of whether they are imbued with soap, detergent or solution, were subject to VAT at the rate of 8% within the scope of Article 1/c of the Decree, this issue has been amended and the VAT rate has been increased to 20%.

The Amendment Decree will enter into force as of July 10, 2023 and the previous VAT rate will apply to the deliveries and imports of goods and rendering of services before this date.

By Cerensu Cetin Yenigun, Senior Associate, and Dilara Atilgan, Trainee Lawyer, Moral, Kinikoglu, Pamukkale, Kokenek

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