31.01.2022/9
About the Amendments to the VAT General Implementation Communiqué
Summary: With the Communiqué Serial No.40 published in the Official Gazette dated 18/01/2022 and numbered 31723, amendments have been made in the General Implementation Communiqué on Value Added Tax. With this amendment, explanations regarding the exemption for Deliveries and Services for National Security Purposes have been added to the Communiqué. In addition, the amendment regarding the extension of the VAT refund application due to the Construction Works within the scope of the Investment Incentive Certificate for the Manufacturing Industry has been included in the Communiqué.
Exemption Application for Deliveries and Services for National Security Purposes
Article 13/f of the Value Added Tax Law has been amended with Article 5 of the Law No. 7349 published in the Official Gazette dated 25/12/2021 and numbered 31700. With the amendment made, effective from 25/12/2021, the deliveries and services made to these institutions within the scope of the relevant projects regarding the defense industry projects carried out by the Ministry of National Defense or the Presidency of Defense Industries are exempt from VAT.
In parallel with the amendment made in Article 13 / f of the VAT Law No. 3065, the phrase “deliveries and services made to these institutions within the scope of the relevant projects in relation to the defense industry projects carried out by the Ministry of National Defense or the Presidency of Defense Industry” was added to the first paragraph of the (II / B-7) section of the Value Added Tax General Implementation Communiqué with Communiqué No. 40.
In addition, to the end of section (II/B-7. 1) at the end of the section; Regarding the defense industry projects carried out by the Ministry of National Defense or the Presidency of Defense Industry, the deliveries and services made to these institutions within the scope of the relevant projects and the deliveries and services to be made to those who perform the deliveries and services within the scope of these projects, the amount and qualifications of which are approved by these institutions, have been exempted from VAT as of 25/12/2021, and the deliveries and services made after 25/12/2021 regarding the defense industry projects carried out by the Ministry of National Defense or the Presidency of Defense Industry, which started and continued before 25/12/2021, when the exemption provision entered into force, were also included in the scope of the exception.
In the section (II/B-7.2.1) of the Communiqué (II/B-7.2.1), the statement that the national security organizations wishing to procure goods and services within the scope of the exemption, the statement that a notification of conformity is received from the Revenue Administration that the goods and services in question are within the scope of the exemption has been removed and replaced with the statement that an opinion can be obtained. Thus, for the deliveries and services to be made within this scope, the application of the Revenue Administration’s notification of conformity has been abolished and the procedure of obtaining an opinion in case of doubt has been introduced instead.
Construction Works within the scope of Investment Incentive Certificate for Manufacturing Industry
Provisional Article 37 of the VAT Law No. 3065 stipulates the principles regarding the refund of VAT incurred due to construction works within the scope of the investment incentive certificate for the manufacturing industry and which cannot be eliminated through discounts. Pursuant to the aforementioned article, the President of the Republic is authorized to extend the periods in the first paragraph of the aforementioned article for up to five years, separately or together, as of each calendar year following the expiration of the periods.
In Article 2 of the Presidential Decree No. 5047 published in the Official Gazette dated 31/12/2021 and numbered 31706 on the subject; “the provisional Article 37 on the return of the value added tax incurred due to the construction works related to the investments made within the scope of the investment incentive certificate for the manufacturing industry and which cannot be eliminated through discounts, as regulated in the aforementioned article, is also applied for the value added tax incurred in 2022, 2023 and 2024 and which cannot be eliminated through discounts.” Thus, the period of the mentioned application has been extended until the end of 2024 and this change has been processed in the (II/E-7) section of the Value Added Tax General Implementation Communiqué with the 4th article of the Communiqué No. 40.
You can access the relevant Communiqué here.
Sincerely,
BİLGENER
