VAT EXCEPTION ON SALES OF HOUSING AND WORKPLACE TO FOREIGNERS
The principle of reciprocity, which is required for foreign real persons to acquire real estate or limited real rights in Turkey, was abolished with the amendment made in the Land Registry Law in 2012, thus facilitating the acquisition of real estate by foreigners in Turkey.
Another regulation that facilitates the purchase of real estate by foreigners in Turkey is VAT exemption. With the regulation made with the Law No. 6824, VAT exemption has been introduced on the first delivery, provided that the cost of the buildings constructed as residences or workplaces as of April 1, 2017 is brought to Turkey in foreign currency. With this regulation, residence or workplace deliveries made as of 01 April 2017 to real persons of foreign nationality who are not resident in Turkey, to institutions whose legal and business center is not in Turkey, and to Turkish citizens living abroad for more than six months are exempted from Value Added Tax.
Buildings constructed as residences or workplaces are included in the scope of the exception regulated in Article 13 of the VAT Law No. 3065. In order for the residence or workplace to be subject to delivery within the scope of this exception; It is obligatory that the building constructed as a residence or workplace has a building permit and is actually delivered ready for the use of the buyers. In residences or workplaces where construction servitude can be established, a construction servitude must also be established. In addition, another condition for benefiting from VAT exemption is that the real estate is subject to sale and delivery for the first time. There is no actual delivery condition for real estates with construction servitude.
The buyers who will benefit from the VAT exemption are required to submit documents proving that they can benefit from the exemption and that they meet the conditions. In so far as it is determined that the exemption is applied even though it does not meet the conditions set forth in the paragraph, the taxpayer and the buyer are jointly responsible for the tax, tax loss penalty and delay interest not collected on time. In the event that the house or workplace received within the scope of the exception is disposed of within one year, the tax not collected on time must be paid by the seller before the deed transaction, together with the deferred interest calculated in accordance with Article 48 of the Law No. 6183.
VAT exemption process; It is a process that should be carried out by lawyers who are experts in the field, as it requires the follow-up of comprehensive legislation such as international private law principles and penal conditions, and as it is necessary to be very careful during the preparation of documents. You can contact us for detailed information from our expert and experienced team.