Important Details About KDV Tax in Turkey

The KDV Tax is a tax imposed at different rates of expenditure, in accordance with the Value-Added Tax Or KDV Law No. 3065 of 1984, although the companies are the ones that pay this tax in accordance with the sales profits they achieve, this tax is deducted from the final goods’ consumers this Means that this tax is ultimately deducted from the individual who consumes the goods. This tax is applied in almost all countries of the world and is imposed in Turkey according to the necessity of the goods consumed by %1, %10 and %20.

Introduction to the KDV Tax in Turkey

The KDV tax is calculated by deducting the tax rates from the selling price of the product. Therefore, the tax is increased according to the high prices of the products’ sales from the producer until it reaches the consumer.

How to Calculate KDV Tax in Turkey?

The simplest way to calculate the KDV tax is to multiply (the price of the product x 1 + the tax rate) For example, assuming a product price of 1000 lira and the tax rate is %20, the calculation is as follows: 1000x (1 + 0.20) = 1000x 1.20 = 1200 lira the price of the Product after listing the tax (after deduction of tax).

For calculating KDV Tax not listed, it is enough to replace the multiplication process with division by dividing the price of the product by (1 + tax rate) e.g. by imposing the price of the product after deducting the tax of 1180 lira and the tax rate is %20, the calculation is as follows: 1200 / (1 + 0.20) = 1200/1.20 = 1000 lira the Product price before listing the tax (before deduction of tax).

What is TOPKDV?

TOPKDV is Turkey’s Value Added Tax (VAT) refund system for tourists and eligible foreign visitors. It allows non-residents to reclaim the VAT they paid on goods purchased in Turkey when these goods are exported outside the country within a specific timeframe, following the official procedures and requirements set by Turkish tax authorities.

Important Tips When Calculating the KDV Tax

In the calculations, the first two places are used that follows the comma in the decimal numbers, and the reason for this is that the third in decimal numbers do not have a class or unit parallel to the Turkish currency, and rounding the third number that follows the comma as follows:

• If the number mentioned is bigger than 5 it will rise to the top such as 5,586 becomes 5,59.
• If the number mentioned is smaller than 5, it will be dragged down as 5,583 becomes 5,58.
• If the number 5 is close to the nearest number such as 5,585 becomes 5,58 because 8 is an even number. In this rule, zero is calculated as an even number. Rounding processes do not exceed the impact of calculations on one penny, which is a must to know the accounting.

Types of KDV Tax for Products in Turkey

As mentioned above, there are three percentages of KDV tax imposed on products, namely %1, %10 and %20, which are divided by the following products:

•  KDV Taxes for Wheat Products

Imposed on wheat and their derivatives that are considered basic consumables materials, as well as residential units that do not exceed an area of 150 square meters. Thus the KDV taxes for such products would be calculated to 1%.

• KDV Taxes for Other Products

Also, imposed on basic consumer materials which that do not fall within the luxury goods, such as meat and its derivatives, milk and derivatives, eggs, legumes, honey, jam, syrup, candy, some animals, and other products and services. So the expected KDV taxes for these products is 10%.

• KDV Taxes for Non-Consumer Products

Imposed on products that are not considered essential consumer goods with certain exceptions, such as communications products, furniture, electrical appliances, some animals, some spices and other products and services. As such, the KDV taxes would be 20%.

To access the full product list, please visit the following link:

http://www.ivdb.gov.tr/pratik/oranlar/yirmibes.htm