Turkey to exempt defense industry products, services from VAT
Otokar's Arma 8x8 tailored for Kazakhstan seen during a test run in the Central Asian country, Kazakhstan, March 1, 2021. (Photo by Kazakhstan Defense Ministry via AA)


Deliveries and services related to Turkey’s defense industry projects carried out by the Ministry of National Defense (MSB) or the Presidency of Defense Industries (SSB) will be exempted from value-added tax (VAT), according to the Official Gazette Tuesday.

According to the amendment made to the value-added tax general application communique, the deliveries and services carried out after Dec. 25, 2021, for defense industry projects and carried out by these two institutions will be covered by this exception.

The amendment includes security institutions that want to provide goods and services and will be implemented upon approval by the Revenue Administration that the goods and services are within the scope of the exemption.

The communique also included a regulation regarding the implementation of a VAT refund for construction within the scope of the investment incentive certificate for the manufacturing industry to cover costs that could not be reimbursed through discounts.

Accordingly, the VAT refund application for construction conducted within the scope of the investment incentive certificate for the manufacturing industry, valid for 2020 and 2021, presented within the scope of the VAT general application communique, will also apply to the VAT tax that was incurred in 2022, 2023 and 2024 and could not be countered by discounts.