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General Communiqué No. 50 provides important clarifications and amendments regarding the implementation of VAT

  • Partial VAT Reverse Charge Limit Increase – The limit for partial VAT reverse charge has been updated to reflect the annually updated invoicing limit. For the year 2024, this limit is set at TRY 6,900, a significant increase from TRY 2,000 in 2023. This change will become effective on March 1, 2024.
  • VAT Deduction for Reverse Charges – Amendments to the VAT Law now permit VAT deduction for reverse charges declared through VAT tax return No. 2. The General Communiqué provides clarity on the implementation of this amendment with practical examples.
  • Calculation of Late Payment Interest – The Communiqué outlines the calculation method for late payment interest concerning tax debts in refunds. This calculation method is based on a decision by the Council of State, which was approved by the General Assembly of Tax Law Chambers.
  • Restriction on VAT Credits for Refunds: VAT credits resulting from transactions leading to a refund cannot be used to offset the tax liability accrued in VAT tax return No. 2, which is submitted due to VAT reverse charges.
  • Expansion of VAT Reverse Charge to Certain Services – The scope of VAT reverse charge has been expanded to include some services provided to public economic enterprises. This expansion will also take effect on March 1, 2024.

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