For foreign-capital companies wishing to invest in Turkey, it is essential to have sufficient knowledge about invoicing procedures in Turkey. Allow us to provide brief and clear information on how invoicing is conducted in Turkey.
Invoicing in Turkey is less flexible compared to other countries, and it can even be said to be entirely inflexible. Invoices created through your own accounting system or arranged on Excel sheets are not considered valid officially. In Turkey, official invoices can only be in one of the following three forms:
1- Paper invoice
2- E-invoice
3- E-archive invoice
Issuing Paper Invoices in Turkey
Any invoice printed on regular A4 paper will not be considered valid officially. Paper invoices issued in Turkey must be printed by authorized printing houses. You can print your invoice on these pre-printed papers. The number of taxpayers who issue paper invoices in Turkey is very limited. This is because companies reaching a certain gross sales volume are obliged to issue electronic invoices (e-invoice). Additionally, even if they are not required to be e-invoice taxpayers, companies that issue invoices above a certain threshold must issue e-invoices. In short, this option is likely not suitable for you.
Issuing E-Invoices in Turkey
As mentioned earlier, almost all companies must become e-invoice taxpayers based on certain criteria. Even if the necessary criteria are not met, you can voluntarily become an e-invoice taxpayer upon request. As the name suggests, the invoicing process is electronic rather than on hardcopy. In Turkey, e-invoices can be issued through three different methods:
1- Directly through the Revenue Administration Presidency (we can call it “tax office” for clarity): This is a method mostly preferred by very small-scale companies, and it is a cost-effective method but results in inefficient workload. Your accountant enters the invoice into this portal, and a copy of the invoice is sent to your customer.
2- Through an integrator: This is the most commonly used method. The invoice you create in your own accounting system (ERP or similar) is converted into a standard e-invoice format through intermediary portals called “integrators” and sent to the Revenue Administration Presidency (RAP), while a copy is also sent to your customer. Integrator costs are quite reasonable. In my opinion, this is the most reliable invoicing method. I recommend it.
3- Via your company’s servers: This method is used by large companies with extensive IT departments and requires expensive infrastructure. Your servers act as integrators, sending your invoice to the RAP and your customer. Unless you have a significant investment in Turkey or a substantial budget, I do not recommend this method.
Issuing E-Archive Invoices in Turkey
If your company is an e-invoice taxpayer but your customer is not (for example, if it is an individual), your customer will not be able to receive the invoice you issued through the e-invoice system mentioned above. To overcome this issue, the method of e-archive invoice has been developed. In this method, your company prepares the invoice as mentioned above, but a copy of the invoice is sent to your customer via email.
In addition to “invoices,” other official documents such as cash register receipts or freelance invoices are also outlined in the Turkish Tax Procedure Law. The type of invoicing you need to perform may vary depending on the nature and structure of your business.
If you would like to obtain detailed information on this topic or if you have any questions regarding tax and accounting practices in Turkey, please feel free to contact us.
[OUR SERVICES] Enhance Your Invoicing Efficiency in Turkey
Understanding the nuances of invoicing in Turkey is key to maintaining smooth business operations and ensuring compliance with local tax regulations. For foreign investors, navigating these requirements can be challenging, especially with frequent changes in Turkish tax policies. We offer specialized services that streamline the invoicing process, ensuring your business remains compliant and efficient.
- Regular bookkeeping to maintain accurate financial records
- Support in submitting monthly and quarterly tax returns
- ERP implementation guidance to enhance invoicing and financial processes
- Establishment of effective internal controls to reduce invoicing errors
- Hands-on training for staff to ensure they understand Turkey’s invoicing and tax requirements
Don’t hesitate to reach out—We’re here to make sure your business benefits from professional, efficient support in Turkey’s complex financial landscape.
FAQ
1. What are the requirements for issuing invoices in Turkey?
Answer:
In Turkey, invoices must include specific details such as the issuer’s and recipient’s names and addresses, tax identification numbers, invoice date, unique serial and number, item descriptions, quantities, prices, VAT rates, and the total amount. Invoices must be issued in Turkish and follow the format prescribed by the Turkish Tax Authority.
2. Is electronic invoicing mandatory in Turkey?
Answer:
Yes, electronic invoicing (e-Fatura) is mandatory for certain businesses in Turkey, particularly for those with annual revenue exceeding a specified threshold or those in specific sectors like e-commerce. It is part of Turkey’s effort to streamline tax compliance and reduce fraud. Companies must use the government’s e-Fatura system to issue and receive electronic invoices.
3. What is the VAT treatment of invoices in Turkey?
Answer:
In Turkey, VAT must be clearly indicated on invoices. The standard VAT rate is 20%, with reduced rates of 10% and 1% for certain goods and services. Businesses can deduct VAT paid on their input invoices from the VAT they collect on sales, subject to compliance with Turkish VAT regulations.
4. How long should invoices be retained in Turkey?
Answer:
In Turkey, businesses must retain invoices for at least 5 years from the end of the fiscal year in which they were issued. This retention period is required for tax audit purposes and to ensure compliance with Turkish tax regulations.
5. What are the penalties for non-compliance with invoicing regulations in Turkey?
Answer:
Penalties for non-compliance with invoicing regulations in Turkey can include fines for failing to issue proper invoices, inaccuracies in invoicing, or not complying with e-Fatura requirements. Penalties vary based on the nature of the violation and can impact a company’s tax standing and financial health.
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