VAT exemption for tourism constructions extended until the end of 2028

An important tax regulation for the manufacturing industry and tourism sector was implemented with the Presidential Decree No. 9770 published in the Official Gazette dated May 1, 2025. Within the scope of this decision, deliveries of goods and services related to construction works for taxpayers holding investment incentive certificates were exempted from Value Added Tax ( VAT ) until December 31, 2028.

First started in 2017

The regulation was based on the temporary article 37, which first came into force in 2017 and provided for the refund of VAT incurred under certain conditions. However, with the amendment made in 2022, direct VAT exemption began to be applied to construction works in documented projects related to manufacturing and tourism investments.

Investment incentive certificate requirement

With the new decision, this exception, which was valid as of May 1, 2022, has been extended until the end of 2028. In this context, taxpayers with investment incentive certificates will not pay VAT on construction contracting works, transportation, excavation and similar services, and purchases of goods for these works. However, purchases exceeding the investment period or outside the scope of the certificate will be excluded from this exception.

Taxpayers who want to benefit from the exemption must apply to the tax office they are affiliated with in terms of VAT and obtain an exemption certificate. Goods and services purchase lists will be entered into the system electronically and VAT exemption will only be valid for the items included in this list. Sellers will be obliged to keep these documents and not calculate VAT on their invoices.

However, expenses not made during the investment period or outside the scope of the project will not be considered within the scope of the exemption. The exemption is only valid for the taxpayer who holds the document, and second-hand buyers in chain purchases will not be able to benefit from this exemption.

While this decision, which has been announced to the public, offers significant advantages for both investors and service providers in the construction sector, it also necessitates working in harmony with the tax administration.