VAT exemption in defense projects

Deliveries and services related to defense industry projects carried out by the Ministry of National Defense (MSB) or the Presidency of Defense Industries (SSB) will be exempt from value added tax (VAT) as of December 25, 2021. According to the amendment made in the value added tax general application communiqué published in today's issue of the Official Gazette, regarding the defense industry projects carried out by the Ministry of National Defense and the Presidency of Defense Industries and which started before 25 December 2021, when the exception provision came into force, and which are continuing, delivery and services will also be covered by the exception. According to the regulation, if there is any hesitation about whether the mentioned goods and services are within the scope of the exemption, the opinion of the Revenue Administration can be obtained by the national security institutions that want to procure goods and services within the scope of the exemption.

Regulation on VAT refund within the scope of incentive certificate

With the Communiqué, a regulation was made in the implementation of the value added tax refund, which was undertaken in the construction works within the scope of the investment incentive certificate for the manufacturing industry and could not be remedied through discounts. According to the regulation made with the Communiqué, the VAT refund application in construction works within the scope of the investment incentive certificate for the manufacturing industry, valid for 2020 and 2021, in the VAT general application communiqué, will also apply to the value added tax that was incurred in 2022, 2023 and 2024 and could not be eliminated by discount.