The minimum threshold for VAT refunds arising from transactions subject to reduced rates has been set at TRY 164,000 for 2026 by the amendment made to the VAT General Implementation Communiqué with Serial No. 56.

1. Scope

Under Article 29/2 of the VAT Law, VAT borne on supplies of goods and services subject to reduced rates that cannot be offset by deduction in the relevant tax periods can be refunded under certain conditions. However, a refund is only possible for the part of the amount not offset during the year that exceeds the minimum threshold set by the Ministry.

For reduced-rate transactions carried out in 2026, this threshold is TRY 164,000. The part of the VAT not offset during the year up to TRY 164,000 cannot be refunded; this amount continues to be carried forward for deduction in later periods.

2. When to request the refund

Reduced-rate refunds are assessed on an annual basis. Refund requests for 2026 transactions can be made with the VAT return for the last period of the year or with returns filed during the following year.

3. Who is affected?

• Businesses supplying goods subject to 1% or 10% VAT, such as food, textiles and health products, while paying 20% VAT on their purchases,
• Taxpayers that constantly carry forward VAT from housing supplies or reduced-rate services.

4. Assessment

Monitoring periodically whether the VAT carried forward during the year will exceed TRY 164,000, and keeping the lists required for a refund request (list of deductible VAT, list of sales invoices) up to date throughout the year, will speed up the refund process.

This circular is for general information only. Please contact us about your specific situation. The Turkish original is available here.

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