What is VAT and How to Calculate It?
VAT (Value Added Tax) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. Most commercial transactions in Turkey are subject to VAT.
Businesses collect VAT from customers for the products they sell (Output VAT) and pay VAT to suppliers for the products they buy (Input VAT). The difference is paid to the tax office.
Calculating VAT Inclusive (Adding VAT)
Net Amount × (1 + (Tax Rate / 100))
Ex: 1000 ₺ + 20% VAT = 1000 × 1.20 = 1200 ₺
Calculating VAT Exclusive (Removing VAT)
Gross Amount / (1 + (Tax Rate / 100))
Ex: 1200 ₺ (VAT Inc.) / 1.20 = 1000 ₺ Net
Current VAT Rates in Turkey (2024-2025)
| Rate |
Category |
Examples |
| %1 |
Basic Food |
Bread, flour, pulses, water, newspapers. |
| %10 |
Textile & Tourism |
Clothing, shoes, hotel accommodation, theater tickets. |
| %20 |
General / Standard |
Furniture, appliances, electronics, services, fuel. |
What is VAT Withholding (Tevkifat)?
Withholding means deduction or sharing. VAT withholding is a system where a portion of the VAT that the seller needs to pay is paid directly to the tax office by the buyer.
- Its purpose is to prevent tax loss and secure collection.
- It is generally applied at rates like 5/10, 7/10, and 9/10. You can automate this calculation using the "Calculate Withholding" button in our tool.
Frequently Asked Questions
What does VAT Base mean?
The base is the raw amount on which the tax is calculated. That is, the net price without VAT added. If a product label says "VAT Inclusive", the base is the pre-tax price of that product.
How to calculate VAT with a calculator?
To add 20% VAT, multiply the amount by 1.2. To remove (extract) 20% VAT, divide the amount by 1.2. For 10%, use 1.1; for 1%, use 1.01.
When did the VAT rates change?
With the regulation made in July 2023, the general rate was increased from 18% to 20%, and the reduced rate from 8% to 10%.