Significant Amendments Introduced To The VAT General Implementation Communiqué

The Communiqué Amending the VAT General Implementation Communiqué (Serial No: 58), published in the Official Gazette dated 16 June 2026, introduces significant amendments to various aspects of Turkish Value Added Tax ("VAT") practice. The amendments update several provisions relating to VAT exemptions and refund mechanisms and introduce notable changes concerning the exemption regime applicable to foundations, donations made to Darülaceze, VAT treatment of expropriation transactions, and VAT refunds relating to goods imported under security.

Accordingly, the Communiqué:

• expands the scope of the existing provisions relating to the Turkish Religious Foundation (Türkiye Diyanet Vakfı) to also cover vested foundations (mazbut vakıflar) administered and represented by the General Directorate of Foundations;
• clarifies that supplies of goods and services provided by certain healthcare institutions operated by higher education institutions established by tax-exempt foundations will become subject to VAT as of 1 January 2027, subject to the conditions set out in the legislation;
• expressly extends the VAT exemption regime to certain donations and supplies made to Darülaceze;
• sets out the implementation principles governing the VAT exemption applicable to transfers of expropriated immovable properties to the relevant public authority carrying out the expropriation; and
• introduces further guidance allowing VAT refunds relating to goods imported under security to be processed without requiring a tax inspection report, provided that the applicable conditions are satisfied.

In this respect, the Communiqué goes beyond merely updating technical terminology and seeks to eliminate practical uncertainties while providing greater clarity regarding the operation of the VAT exemption and refund regime. The principal amendments are summarised below.

Expansion of the Scope of the Provisions Applicable to the Turkish Religious Foundation

The amendment to Section (II/B-15.1.3.) of the Communiqué broadens the previous wording, which referred solely to immovable properties owned by the Turkish Religious Foundation, so as to also include immovable properties owned by vested foundations administered and represented by the General Directorate of Foundations.

Accordingly, the scope of the relevant VAT exemption has been expanded and is no longer limited exclusively to the Turkish Religious Foundation.

Extension of the VAT Exemption for Donations Made to Darülaceze

The Communiqué extends the existing VAT exemption applicable to certain donations and supplies made to associations and foundations so as to expressly include Darülaceze.

To this end, amendments have been introduced to Sections (II/F-2.5.), (II/F-2.5.1.), (II/F-2.5.3.), (II/F-2.5.4.) and (II/F-2.5.5.) of the Communiqué by expressly referring to Darülaceze within the relevant provisions.

The amendment is intended to strengthen consistency in the application of VAT exemptions relating to donations made for public benefit and social assistance purposes.

VAT Exemption Applicable to Transfers of Expropriated Immovable Property

A new Section (II/F-4.27.) has been added to the Communiqué regulating the VAT exemption applicable to transfers of immovable property expropriated pursuant to the Expropriation Law No. 2942 where a public interest decision has been adopted.

Accordingly, transfers of immovable property owned by VAT taxpayers to the State or other public legal entities carrying out the expropriation will be exempt from VAT.

However, any input VAT previously deducted in relation to the acquisition of the relevant immovable property must be removed from deductible VAT through the relevant line of the VAT return .

The Communiqué further clarifies that the VAT removed from deductible accounts may be treated as a deductible expense or cost item for corporate income tax or income tax purposes.

The amendment entered into force upon publication and applies retrospectively as from 1 June 2026.

Clarification Regarding Tax-Exempt Foundation Universities

The Communiqué also clarifies the VAT treatment applicable to supplies of goods and services provided by certain institutions operated by higher education institutions established by foundations benefiting from tax-exempt status.

Following the amendments introduced to Article 17/2-a of the VAT Law by Law No. 7577, supplies made by hospitals, clinics, convalescent homes, dispensaries, sanatoriums, blood banks, organ banks, museums, botanical and zoological gardens, parks, veterinary, bacteriology, serology and distofajin laboratories operated by such higher education institutions will become subject to VAT under the general rules as of 1 January 2027.

However, where such institutions are operated directly by the tax-exempt foundation itself, the existing VAT exemption will continue to apply.

The relevant amendment will enter into force on 1 January 2027.

Conclusion

Taken as a whole, the amendments introduced to the VAT General Implementation Communiqué seek to establish a clearer, more predictable and systematic framework for the application of VAT exemptions and refund mechanisms.

In particular, the clarification of the VAT treatment applicable to expropriation transactions, the revised rules governing higher education institutions established by tax-exempt foundations, the express inclusion of Darülaceze within the scope of the exemption regime, and the additional guidance concerning VAT refunds for goods imported under security are expected to have practical implications for a broad range of taxpayers and public institutions.

Accordingly, taxpayers should carefully assess the amendments introduced by the Communiqué in light of their transaction-specific VAT obligations and existing exemption practices.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.