Is Your Business Ready for Turkey’s Digital Tax Transformation?

Selin Adler Ring
November 26, 2019

This blog was last updated on February 29, 2024

The value of data is rising

The value of data is becoming more precious than oil.  Technology has transformed market dynamics across all sectors and the way businesses operate. Big data has grown in importance and data-based platforms are today’s new technology giants. On one hand; Facebook, Google and other data-based platforms are collecting data to monetize it, whilst at the same time governments around the globe are taking steps to collect financial and fiscal data. The latter is particularly true in countries where the tax gap is large. When governments and tax authorities first started the digital collection of financial data, it was typically done periodically, resulting in audits of taxpayers based on the data after it had been collected. Today however, a growing number of countries’ tax authorities are collecting data in real-time. Turkey, having been an early adopter and an example of a country successfully collecting real-time financial data from businesses to increase the effectiveness of their VAT enforcement, is now extending the scope of its VAT control framework.

Turkey’s digital tax journey

The e-invoicing framework was introduced in Turkey as early as 2012. Since then, the scope of the e-invoicing mandate has gradually grown. Every day there are new requirements to speed up the digital tax transformation. With the latest General Communique on the Tax Procedure Law (Communique) published on 19 October 2019, more taxpayers now need to comply with the mandatory e-invoicing framework. Additionally, the previously introduced concepts of e-arşiv, e-waybills and e-export invoices are other mandatory e-documents for certain businesses to issue and store. New e-documents were also introduced for the first time with the Communique: e-Self Employment Receipts, e-Producer Receipts, e-note of expenses, e-Tickets, e-Insurance Commission Expense Documents, e-Insurance Policy, eDocument of Currency Exchanges, and e-Bank Receipts.

Thresholds reduced

With the new framework, the turnover threshold for mandatory e-invoicing has been lowered to 5 million Turkish Lira (TL) compared to the previous threshold of 10 million TL. This change means that by 1 July 2020, companies with at least 5 million TL turnover in 2018 or 2019 will have to switch to e-invoices. Taxpayers exceeding this limit in 2020 or later will have to switch to e-invoices by 1 July of the following accounting year.

However, mandatory e-invoicing is not only based on the threshold; there are also sector-based parameters. Companies licensed by the Turkish Energy Market Regulatory Authority, middlemen or merchants trading fruits or vegetables, online service providers facilitating online trade, importers and dealers are some of the taxpayers that are also required to switch to e-invoices, irrespective of their turnover. E-invoice registered businesses must also follow the e-arşiv application from 1 January 2020.

Moving goods within Turkey

Another important e-document is the e-waybill, a document that is required for the movement of goods within Turkey and which must be issued before the dispatch of the goods occurs. As stated in article IV.3.5. of the Communique it is mandatory for certain businesses, depending on the threshold and the sector they operate in, to register for the e-waybill application by 1 July 2020.

A General Communique on e-Ledgers was also enacted on the same date as the Communique. According to the e-ledger provisions, companies in scope of the e-invoice mandate must also start to keep e-ledgers. In addition, companies that are subject to independent audits must start to keep e-ledgers from January 2020.

The new e-documents framework in Turkey puts pressure on businesses as the new rules are calling for new actions. To survive and prosper in the digital tax transformation era businesses operating in Turkey need to have robust e-invoicing strategies in place that not only meet their needs but also comply with the growing demands of tax authorities across the world.

 

Take Action

Learn how Sovos helps companies handle e-invoicing and other mandates all over the world. To find out more about what we believe the future holds, download the Sovos eBook on trends in e-invoicing compliance.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Selin Adler Ring

Selin is Regulatory Counsel at Sovos. Based in Stockholm and originally from Turkey, Selin’s background is in corporate and commercial law, and currently specializes in global e-invoicing compliance. Selin earned a Law degree in her home country and has a master’s degree in Law and Economics. She speaks Russian, Arabic, English and Turkish.
Share this post

Hungary Supplemental Insurance Premium Tax
EMEA IPT
July 11, 2022
Extra Profit Tax: An Introduction to Supplemental IPT in Hungary

This blog was last updated on October 28, 2024 Update 7 October 2024 by Edit Buliczka Hungarian Tax Office Updates IPT Declaration Form for 2023 The procedure necessary to correct an underdeclared premium figure in Hungary can be complicated. The complexity of a correction for return form 2320 has become even more challenging. Following a […]

sales tax vs. use taxes
North America Sales & Use Tax
November 8, 2024
Demystifying Tax Types: Sales Tax vs. Seller’s Use Tax vs. Consumer’s Use Tax

This blog was last updated on November 8, 2024 One of the core concepts in sales tax compliance is also one of the most frequently misunderstood: the differences between sales tax and use tax. These tax types may look similar on the surface, but knowing the differences is essential for staying compliant and avoiding costly […]

2025 bond project
North America Tax Information Reporting
November 4, 2024
The Insurer’s Guide to the 2025 Bond Project

This blog was last updated on November 4, 2024 The regulatory landscape for insurance companies is undergoing significant changes with the Principles-Based Bond Project which is set to take effect on January 1, 2025. These changes, driven by the National Association of Insurance Commissioners (NAIC), will impact how insurance companies classify and value bond investments, […]

E-Invoicing Compliance EMEA VAT & Fiscal Reporting
November 1, 2024
VAT in the Digital Age Approved in ECOFIN

This blog was last updated on November 7, 2024 The long-awaited VAT in the Digital Age (ViDA) proposal has been approved by Member States’ Economic and Finance Ministers. On 5 November 2024, during the Economic and Financial Affairs Council (ECOFIN) meeting, Member States unanimously agreed on adopting the ViDA package. This decision marks a major […]

what is peppol
E-Invoicing Compliance North America
October 29, 2024
What it is PEPPOL?

This blog was last updated on October 29, 2024 Peppol E-invoicing explained: What it is and how it works The global adoption of electronic invoicing is accelerating. Governments worldwide are pushing to adopt e-invoicing to digitally transform their national systems and, often, to close the VAT gap. While many countries have introduced their own e-invoicing […]

remote sellers sales tax
North America Sales & Use Tax
October 28, 2024
Will Congress Act to Simplify Remote Seller Sales Tax Collection

This blog was last updated on November 5, 2024 When the United States Supreme Court ruled in 2018, that South Dakota’s law imposing sales tax collection requirements on sellers without in-state physical presence was constitutional, it did not grant states free reign. States are still responsible for ensuring that their sales tax requirements are manageable, […]