Since services such as food and beverage, accommodation, transportation, guidance, trip and health are provided abroad for those who participate in tours organized abroad by travel agencies residing in Turkey, and passengers benefit from these services abroad, these services are not subject to VAT in Turkey. However, domestic services provided to those participating in the tour organization are subject to VAT.
Therefore, VAT is not applied to the costs and amounts shown in the documents of these services, provided that the service fees purchased from abroad related to the tour activity are documented within the framework of the Tax Procedure Law No. 213.
In the invoice to be issued to the customers by the travel agency, the entire price constituting the service provision is shown. However, VAT is calculated over the remaining amount after deducting the service fees abroad.
On the other hand, if the cost of passenger transportation abroad is invoiced separately or the cost of transportation is shown separately in the invoice to be issued, this fee is exempt from VAT in accordance with Article 14 of the Law No. 3065.
Example: (A) The sum of the fees obtained by the travel agency due to the tour activities organized in April/2013 is 50.000 TL. Expenses related to services such as accommodation, food and beverage, and guidance purchased by the company from abroad for its customers during this trip have been documented with documents in accordance with the Tax Procedure Law No. 213. The total of such expenses is 15.000 TL, and the total of the ticket costs for transportation is 20.000 TL.
In this transaction,
15.000 + 20.000 = 35.000 TL Not subject to VAT
VAT is calculated over 50.000 – 35.000 = 15.000 TL.
However, in order to be able to carry out the transaction in this way, the company must separately show the amount of expenses incurred abroad and the cost of transportation on the invoices to be issued to its customers, and calculate the tax on the remaining amount.
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Source: Revenue Administration of Republic of Turkey – Translated by Karen Audit – The rights of this translation belong to KarenAudit and unauthorized use is prohibited.
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