When we say export, the first thing that comes to our minds is the export of goods. Besides the export of goods, another important branch of exports is the service export. Although it is not yet familiar to us as much as the export of goods, service exports are an important emerging trend in global trade which affects many sectors.
What counts as a Service Export?
A service export is any service provided in foreign currency by a company in Turkey to other companies abroad. In Turkey, the services which are provided to a company located in a foreign country are exempted from VAT.
Apart from export deliveries, with the article 11/1-a of the VAT Law, the services provided for customers outside of Turkey are exempted from VAT.
There are some criteria for service exports to be exempted from VAT. You can find the details below:
- The service must be provided to a customer outside of Turkey.
- The invoice or the document of a similar nature must be issued on behalf of the customer abroad.
- Remuneration of Service must be received in foreign currency, not in Turkish Liras.
- The beneficiary part must be located in another country.
On the other hand, in the (B) section of the Implementation of the Value Added Tax Law (Serial No. 133), it is stated that the remuneration of service must be declared during the period in which the service is realized. However; the return of taxes that are related to those actions and exempted from tax reduction will not be issued until the remuneration of service in foreign currency is received by Turkey, defined in article 32 of the VAT Law.
According to that statement,
- The engineering, project commitment and consultancy services given from Turkey to a company operating abroad,
- Services such as barcoding, handling, brokerage, manufacturer selection and order tracking given in Turkey for the products which will be imported from Turkey to another country by a foreign company,
the VAT will be exempted within the scope of the 11th and 12th articles of the VAT Law and the declarations in the general communiqués on the subject.
Below, you can find out that in which fields the service export can be realized and which sectors are covered.
- Passenger Transport Services
- Port Management and Ground Services
- Contracting and Technical Consulting Services
- Freight Transport and Logistics Services
- Services Related with Tourism and Travel
- Software and IT Services
- Telecommunications Services
- Health Services
- Entertainment and Cultural Services
- Education Services
- Other Business Services (Retail, Gastronomy, Consulting, etc.)