Turkish Exporters Face Financial Strain as VAT Exemption Ends After 27 Years in 2026

• Türkiye’s VAT exemption for domestically sourced inputs under the inward processing procedure expired at the end of 2025 after 27 years.
• Exporters now must pay VAT on domestic purchases, with refunds only available through standard processes, increasing financial pressure.
• The change is expected to particularly impact export-oriented SMEs, which make up nearly 30% of Türkiye’s exports and often have tight margins.
• Exporters warn the removal of the exemption will hurt liquidity and force reliance on high-interest loans.
• Industry leaders urge the government to reconsider or modify the policy to continue supporting export-driven production.

Source: turkiyetoday.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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