VAT PAID WITHIN THE SCOPE OF IMPORT SURVEILLANCE IS NON-DEDUCTIBLE

Summary

“(1) In accordance with the relevant legislation on the application of surveillance in imports, the right to deduct value-added tax (VAT) paid on amounts declared but not documented in customs declarations for goods subject to the surveillance application, as well as on any taxes, duties, fees, and shares arising from these amounts and included in the VAT base, has been abolished.

(2) In accordance with the relevant legislation on the application of safeguard measures in imports, the right to deduct value-added tax (VAT) paid on customs duties and/or additional financial obligations applied as safeguard measures, anti-dumping duties and countervailing duties applied within the scope of the relevant legislation on the prevention of unfair competition in imports, as well as on any taxes, duties, fees, and shares arising from these amounts and included in the VAT base, has been abolished.”
 

With the relevant Official Gazette, it has been announced that for imports carried out as of January 31, 2026, the deduction of VAT arising from surveillance applications cannot be made.
 

ARTICLE 5 – The following section has been added after section (III/C-2.5.) of the same Communiqué:
 

“2.6. Deduction of VAT Paid within the Scope of the Relevant Legislation on the Application of Surveillance in Imports, Safeguard Measures, and the Prevention of Unfair Competition in Imports

The Decision annexed to the Presidential Decision dated 23/11/2023 and numbered 7846, published in the Official Gazette dated 24/11/2023 and numbered 32379, contains the following provision:

“(1) In accordance with the relevant legislation on the application of surveillance in imports, the right to deduct value-added tax (VAT) paid on amounts declared but not documented in customs declarations for goods subject to the surveillance application, as well as on any taxes, duties, fees, and shares arising from these amounts and included in the VAT base, has been abolished.

(2) In accordance with the relevant legislation on the application of safeguard measures in imports, the right to deduct value-added tax (VAT) paid on customs duties and/or additional financial obligations applied as safeguard measures, anti-dumping duties and countervailing duties applied within the scope of the relevant legislation on the prevention of unfair competition in imports, as well as on any taxes, duties, fees, and shares arising from these amounts and included in the VAT base, has been abolished.”

2.6.1. General Explanation

According to Presidential Decision No. 7846, it is not possible to deduct the VAT paid on the increase amounts arising in the VAT base of imported goods due to these applications, as well as on any taxes, duties, fees, and shares relating to these increase amounts under the legislation on import surveillance, import safeguard measures, and the prevention of unfair competition in imports.

However, it is possible to deduct the VAT paid on values outside the scope of these applications in the VAT base of imported goods, as well as on any taxes, duties, fees, and shares relating to these values.

Example: (A) A.Ş. imports product (Z), which has a CIF value of 4,000,000 TL and a surveillance value of 10,000,000 TL, within the scope of the import surveillance application. Customs duty (CD) at a rate of 10%, additional customs duty (ACD) at a rate of 15%, and VAT at a rate of 20% were paid on the imported product. The unsubstantiated amount arising from the surveillance application was declared as an overseas expense in the customs declaration of the import. Accordingly, the non-deductible VAT and deductible VAT amounts under the import surveillance application shall be calculated as follows:

2.6.2. Determination of Whether VAT Disallowed Under Presidential Decision No. 7846 is Deducted

Within the scope of Presidential Decision No. 7846, it is not possible to deduct the VAT paid on:

- Amounts declared but not documented in customs declarations for goods subject to surveillance in accordance with the relevant legislation on the application of surveillance in imports;

- Customs duties and/or additional financial obligations applied as safeguard measures in accordance with the relevant legislation on the application of safeguard measures in imports;

- Anti-dumping duties and countervailing duties applied within the scope of the relevant legislation on the prevention of unfair competition in imports;

And any taxes, duties, fees, and shares arising from these amounts and included in the VAT base.

In this context, taxpayers executing imports:

- Shall report to their affiliated tax office, by the end of the month following the semi-annual period, whether the VAT relating to imports whose total import value does not exceed the amount specified in subparagraph (a) of the first paragraph of Article 3 of the General Communiqué Serial No. 46 of the Law on Independent Accountants, Certified Public Accountants, and Sworn-in Certified Public Accountants on a semi-annual basis of the calendar year, has been correctly deducted in the VAT return of the period in which the transaction was made, under the scope of the said Decision.

- Should the total import value exceed the specified threshold on a semi-annual basis of the calendar year, the correct deduction of the VAT paid due to the said applications under the scope of the said Decision shall be certified by a Special Purpose Sworn-in CPA Report to be submitted by the end of the month following the semi-annual periods. However, if the taxpayer has a timely-executed full certification contract for the year the import was made, and if the report to be issued contains an explanation regarding whether the VAT paid for imports realized within the scope of Presidential Decision No. 7846 was deducted, the presentation of a Special Purpose Sworn-in CPA Report is not required.”

Official Gazette