Rate and Scope Updated in VAT Partial Stoppage Application

Amendments have been made regarding the rate of partial stoppage applications and its scope with the Communiqué (Row No: 35) on Amending the Communiqué of Value Added Tax General Application, which was published in the Official Gazette No. 31397 on 16 February 2021.

Related amendments are as follows;

• Insurance and reinsurance companies, unions and their higher organizations, foundation universities and mobile electronic communication operators were added to the scope of designated beneficiaries.
• The stoppage rate was increased from 3/10 to 4/10 in construction works and engineering, architectural and survey project services performed with these works. Construction works provided to VAT taxpayers, who are excluded from the specified beneficiaries, and above 5 million TL are included within the scope of stoppage.
• The stoppage rate was increased from 5/10 to 7/10 in maintenance and repair services of machinery and equipment, fixed assets, and vehicles.
• The VAT stoppage rate was increased from 7/10 to 9/10 in outsourced textile and apparel works, bag and shoe sewing and brokerage services for these works.
• The stoppage rate was increased from 7/10 to 9/10 in cleaning, landscaping, and gardening services.
• Transportation services provided to VAT taxpayers and specified beneficiaries are included to the scope of stoppage application. VAT stoppage rate in transportation services of goods is determined as 2/10, and in transportation of services as 5/10.
• The VAT stoppage rate was increased from 5/10 to 7/10 in all kinds of printing and publishing services.
• The stoppage rate was amended from 3/10 to 4/10, and from 7/10 to 9/10 in services provided in health facilities built through Public Private partnership model.
• Commercial advertisement services are included to the scope of stoppage application. 3/10 VAT stoppage rate will be applied in advertisement services provided to VAT taxpayers and specified beneficiaries.
• The administrations, institutions and organizations within the scope of the tables attached to the Law No. 5018, in addition to the public institutions and organizations established by the law, circulating capital enterprises, professional organizations in the nature of public institutions, banks, insurance and reinsurance companies, pension funds and aid funds established by law or legal entities and development agencies will apply a VAT stoppage at the rate of 5/10 by the beneficiaries in question in all other services performed and not specifically specified in the Communiqué.
• All other deliveries (water, electricity, gas, heating, cooling and similar energy uses are excluded) made to Directorate General of State Supply Office by VAT taxpayers will be subject to VAT stoppage with the rate of 2/10.
• While payment of the VAT declared and accrued by the buyer with the VAT declaration No. 2 is not required for refund requests, it has been made compulsory with the amendment.

Amendments will be effective as of 01.03.2021.

Relevant Official Gazette can be accessed from here (in Turkish).

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