Calculate VAT withholding

The buyer keeps part of the VAT on the invoice instead of paying it to the seller, and declares and pays that part itself. On a progress payment a designated buyer declares the withheld VAT on the KDV-2 return; the contractor is paid only the rest.

4/10 (VAT General Application Communiqué I/C-2.1.3.2.1). On a ₺100,000 payment at 20% VAT, the VAT is ₺20,000; a designated buyer withholds ₺8,000 and pays the contractor ₺12,000 of VAT.

No. The communiqué's list of designated buyers (I/C-2.1.3.1/b) names the unions municipalities form and the water and sewerage authorities of metropolitan municipalities, not municipalities themselves. So nothing is withheld on work for a municipality. If the purchase is made for its VAT-registered business or company, the rules for VAT-registered buyers apply.

No. The condition of 5 million TL or more, VAT included, is for works done for buyers who are VAT payers (I/C-2.1.3.1/a). On works for designated buyers (I/C-2.1.3.1/b) it does not apply; the invoice limit still does.

The limit looks at the whole job, not the invoice: an amount cannot be split to stay under it. For the payments of one job such as works, the contract price, VAT included, counts; when the contract passes the limit, a small payment is withheld on too. For services completed month by month, that month's invoice counts. A price-difference invoice is withheld on without the limit when the main job was (I/C-2.1.4.2). Since 1 March 2024 the limit is the year's invoicing limit: ₺6,900 in 2024, ₺9,900 in 2025, ₺12,000 in 2026. Before, it was fixed: ₺2,000 from 1 July 2021 to 29 February 2024, and ₺1,000 earlier.

5/10 (I/C-2.1.3.2.13, other services), but only the buyers the communiqué lists withhold it: administrations in the schedules of Law No. 5018, public bodies set up by law, state-owned enterprises (since 1 March 2024), revolving-fund bodies, banks and the like. Provincial administrations, municipalities and foundation universities are not on the list. Vehicle rental and software development fall here.

The code GİB's withholding code list gives the work: 601 for works, 602 for consulting, 606 for labour supply, 607 for private security, 612 for cleaning, 616 for other services, 627 for iron and steel, and so on. The method table lists them all. An invoice with nothing withheld carries no code.

On the "c) KDV Tevkifatı ( F x 4/10)" line among the deductions. F is this payment's VAT; the withheld amount counts as a deduction and comes off what the contractor is paid.