For foreign entrepreneurs and freelancers living in Turkey, one of the biggest advantages is the “Service Export” incentive. If you establish a company in Turkey (Limited or Sole Proprietorship) and provide services to clients abroad, you can legally issue invoices with 0% VAT (KDV). This guide explains the technical requirements to qualify for tax exemptions in 2026.

Service Export vs. Local Invoicing (2026 Comparison)

Criteria	Invoicing a Local Client (Turkey)	Invoicing a Foreign Client (Abroad)
VAT Rate	20% (Standard)	0% (Exempt)
Invoice Type	e-Arşiv / e-Fatura (TL)	e-Arşiv / e-Fatura (FX Allowed)
Income Tax	Standard Rates	80% Exemption* (Specific Sectors)

*Software, design, engineering, and data processing services may qualify for income tax deduction.

Can Foreigners Issue Invoices from Turkey?

Yes. To issue a legally valid invoice in Turkey, you do not need Turkish citizenship. You only need:

• A registered business entity (Sole Proprietorship or LLC).
• A Tax Identification Number (Vergi Kimlik No).
• Access to the Digital Tax Office or an e-Invoice integrator portal.

Note: In 2026, almost all B2B invoices are issued digitally as “e-Arşiv Invoice” or “e-Fatura”. Paper invoices are obsolete.

The “0% VAT” Rule (Service Export Exemption)

Just because your client is foreign does not automatically make the invoice VAT-free. According to the Value Added Tax Law (Article 11/1-a), four strict conditions must be met:

1. Service Provider: The service must be performed by a resident company in Turkey.
2. Client Location: The invoice must be issued to a customer located abroad.
3. Benefit Location: The service must be utilized/enjoyed abroad. (e.g., You write code for a UK app used in the UK).
4. Payment Flow: The payment must be brought to Turkey in foreign currency (Döviz Alım Belgesi or bank receipt is required).

How to Issue a 0% VAT Invoice? (Step-by-Step)

When creating your invoice on the portal, follow these steps to ensure compliance:

1. Select “Istisna” (Exemption) as the invoice type instead of “Satis” (Sale).
2. Enter the VAT Exemption Code: 302 – Hizmet İhracatı (Service Export).
3. Write the invoice amount in the agreed currency (USD, EUR, GBP). The system will automatically show the TL equivalent based on the Central Bank rate.
4. Add a note in the description: “VAT Exempt pursuant to Article 11/1-a of VAT Law No. 3065”.

Receiving Payments: Wise, Payoneer, and SWIFT

A common question is: “Can I use Wise or Payoneer?”

Yes, you can use fintech platforms to collect payments. However, for tax exemption purposes, the funds eventually need to enter the Turkish banking system. Keeping the money in a digital wallet indefinitely may risk your “Service Export” status during a tax audit. It is recommended to transfer the funds to your Turkish corporate bank account periodically.

Withholding Tax (Stopaj) Rules

When you sell services abroad, there is typically no withholding tax. Withholding tax in Turkey generally applies when you buy professional services (e.g., paying rent to a landlord, paying a lawyer, or paying a freelancer). Therefore, your foreign client does not need to withhold any tax from your payment; they pay the full invoice amount.

Sıkça Sorulan Sorular (FAQ)

Can I issue an invoice in USD or EUR?

Yes. Turkish law allows invoices to be issued in foreign currencies for transactions with foreign clients. However, the VAT amount (if any) and the total must also be shown in Turkish Lira (TL) on the document for accounting records.

What if my foreign client is a Turkish citizen living abroad?

Citizenship does not matter; residency does. If your client lives abroad, has a business address abroad, and the service is utilized abroad, the transaction is considered a service export (0% VAT).

Do I need an accountant to issue invoices?

While you can physically create the invoice on the portal yourself, it is highly recommended to have a CPA (Mali Müşavir) guide you. Incorrectly using the VAT exemption code (302) can lead to severe penalties and interest charges.

Professional Invoicing Support

Setting up your e-Invoice system and verifying your eligibility for VAT exemption is the first step to financial freedom in Turkey. Vergi Merkezi | Mali Müşavirlik helps foreign entrepreneurs manage their billing cycles and tax compliance seamlessly.

📍 Service Areas: Istanbul, Ankara, Izmir, and Remote Support.

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For Online Services and Information Contact Us

Ready to establish or grow your business in Turkey? Contact Vergi Merkezi | Mali Müşavirlik today for a consultation with our expert accountants.

• 📞 Phone: +90 533 328 37 04
• 📧 Email: [email protected]

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📚 Kaynaklar ve Referanslar

Birincil Kaynaklar

1. T.C. Resmi Gazete
   Law: Value Added Tax Law No. 3065 (KDV Kanunu)
   Subject: Article 11/1-a (Service Export Exemption)
2. Revenue Administration (GİB)
   Circular: VAT General Implementation Communique (KDV Genel Uygulama Tebliği)

Destekleyici Kaynaklar

3. Central Bank of the Republic of Turkey (TCMB)
   Subject: Foreign Exchange Regulations for Export Income