Increase in VAT and Some Taxes and Fees Rates Published in the Official Gazette
TAX CIRCULAR NO: 2023-04 | DATE: 07.07.2023 |
With the Presidential Decree No. 7346, the general VAT rate which is currently applied at 18% has been increased to 20%, and the VAT rate for goods and services subject to 8% VAT has been raised to 10%. The regulation will come into effect on July 10, 2023. No changes have been made to the 1% rate applied to goods and services listed in Annex (I). The VAT rate for soap, shampoo, detergent, disinfectants, wet wipes (whether or not they are impregnated with soap, detergent, or solution), toilet paper, paper towels, paper tissues, and napkins has been increased from 8% to 20%.
According to Article 28 of the Value Added Tax Law, the Council of Ministers is authorized to increase the VAT rate up to four times or decrease it down to 1% for taxable transactions, and to determine different tax rates for various goods and services and for the retail stage of certain goods within these rates.
In this context, different VAT rates have been applied for different goods and services with regulations issued by the Council of Ministers/Presidential Decrees at different times.
Finally, with the Decree No. 2007/13033 published in the Official Gazette dated December 30, 2007 and numbered 26742, all previous decrees regarding the determination of VAT rates for goods and services were abolished, and a basic regulation was made for VAT rates.
In this regulation, the triple rate system and rates applied to goods and services were preserved, except for those listed in Annex (I) and Annex (II), and VAT rates for taxable transactions were determined as 18%, VAT rates for goods and services listed in Annex (I) as 1%, and VAT rates for goods and services listed in Annex (II) as 8%.
Subsequently, changes have been made to the tax rates listed in the annex of the Decree. Therefore, with the Presidential Decree No. 7346 published in the Official Gazette dated July 7, 2023 and numbered 32241, the general VAT rate which is currently applied at 18% has been increased to 20%, and the VAT rate for goods and services listed in Annex (II) and subject to 8% VAT has been raised to 10%.
Furthermore, with the Decree No. 7346, a change has been made in the 37th item of Annex (II). Therefore, the VAT rate for soap, shampoo, detergent, disinfectants, wet wipes (whether or not they are impregnated with soap, detergent, or solution), toilet paper, paper towels, paper tissues, and napkins has been increased from 8% to 20%. The regulation will come into effect on July 10, 2023.
Source: www.turmob.org.tr.
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