Turkey Expands VAT Exemptions for Defense, Security, and Public Sector Transactions – Communiqué No. 55

The Turkish Revenue Administration has issued Communiqué Serial No. 55, amending the General Communiqué on VAT Implementation. This update introduces several key changes aimed at clarifying exemptions and improving administrative procedures.

Key Highlights

Defense Industry VAT Exemption Expanded Deliveries of goods and services related to defense projects—such as aircraft, helicopters, submarines, and armored vehicles—approved by the Ministry of National Defense or Defense Industry Presidency are now exempt from VAT under Article 13/f of the VAT Law.
New Exemption for Security-Use Vehicles Vehicles listed under customs tariff codes 87.03, 87.04, and 87.11, when delivered exclusively for national defense or internal security purposes to designated institutions (e.g. Ministry of Defense, Interior Ministry, MIT), are VAT-exempt under Article 13/o.
Extended Application Period for Certain Incentives The application of specific VAT exemptions and incentives has been extended to 31 December 2028, following a Presidential Decree.
Clarification on Real Estate Transactions Sales and leases of immovable properties by the Treasury, TOKİ (Housing Development Administration), and the Directorate General of Foundations are VAT-exempt, but only for land and plots—not for buildings or facilities.
Import VAT Base Adjustments For goods subject to Special Consumption Tax (ÖTV), the ÖTV amount used as collateral during importation is now included in the VAT base, affecting how import VAT is calculated.
Refund Procedures for Capital Goods (ATİK) Detailed rules are introduced for calculating VAT refunds related to capital goods used in both taxable and non-taxable operations, including proportional allocation based on usage.