September 17: A decision of the tax court of Turkey concludes
that entities operating in free trade zones are not required to
calculate value added tax (VAT) using a reverse-charge basis with
respect to services provided by resident and non-resident companies
to an entity operating in the free trade zone.
Background
An unresolved issue between Turkey's tax authority and
taxpayers concerns the status of entities operating in free trade
zones and whether services received (both from resident and
non-resident companies) are subject to VAT.
Under Turkey's VAT law, services performed (or the benefits
of which are provided) in Turkey are subject to VAT.
The position of Turkey's tax authority has been that free
trade zones are within the political boundaries of Turkey
geographically and, as such, services received by entities in free
trade zones, either from resident or non-resident companies, are
subject to VAT because the services are deemed to be used / to
provide
