VAT Application in the Sales of Cards, Passwords and Codes

Cards, passwords, and codes (such as activation codes, PIN codes, game codes) used to activate products and services such as virtual games, applications, music, or to provide secure online shopping opportunities, are sold electronically or physically. These cards, passwords, and codes are later used to pay for the consideration of deliveries or services to be made, and their sale involves a transfer of purchasing power. Therefore, the amounts paid during the sale of these cards, passwords, and codes are not subject to VAT, as they do not correspond to consideration for a delivery or service. The commissions received for facilitating the sale transactions of these cards, passwords, and codes are generally subject to VAT.

However, when the mentioned cards, passwords, and codes are used to activate and utilize products and services such as games, applications, music, or for online purchases of goods or services, subject to conditions such as the utilization of services in Turkey, delivery of services in Turkey, or the importation of goods, VAT is applicable.

In this context,

For services acquired from foreign-resident companies by taxpayers in Turkey or by those who, while not being taxpayers, are responsible for withholding tax, the VAT calculated for this transaction is to be declared using the No. 2 VAT Return as representatives,

For services acquired from foreign-resident companies by natural persons in Turkey who are not VAT taxpayers, the VAT calculated for this transaction is to be declared using the No. 3 VAT Return by the foreign-resident company,

For services provided within Turkey by taxpayers in Turkey and benefiting from these services in Turkey, the VAT calculated is to be declared using the No. 1 VAT Return by the Turkish taxpayer providing the service,

For goods acquired by real and legal persons in Turkey,

Imported from foreign companies, VAT is applied by the customs administration during importation according to general rules,
Acquired from taxpayers in Turkey, VAT is calculated by these taxpayers according to Article 1/1 of Law No. 3065 and is declared using the No. 1 VAT Return,

is required.”

Source: alomaliye.com