With the new notification published in the Official Gazette dated April 27, 2024, significant changes were made regarding Value Added Tax (VAT) rates. This update, announced by the Ministry of Treasury and Finance (Revenue Administration), includes regulations that will especially affect the food and beverage industry. Significant Changes in VAT Rates…
Article 1: Increase in VAT Rates and New Regulations
III/B-2.4 of the Value Added Tax General Implementation Communiqué published in the Official Gazette No. 28983 dated 26 April 2014. VAT rates in the section have been updated. While the old rates were 8% and 18%, with the new regulation these rates were changed to 10% and 20% respectively. In addition, additions were made to various sections of the communiqué and the VAT rates to be applied according to the consumption patterns of foodstuffs were clarified.
Sample Applications and Explanations
The new regulation includes important changes for businesses operating in the food and beverage industry. Businesses will apply the new VAT rates determined on the sales of food items they produce or procure from outside. With the examples given in the communiqué, it was detailed in which cases 10% or 20% VAT would be calculated. For example, a coffee shop will apply 10% VAT on the sales of cakes it procures from outside, along with the coffee it prepares itself. Similarly, a restaurant will calculate 10% VAT on the sale of baklava as well as the food service.
Article 2: Effective Date
This notification will enter into force at the beginning of the month following its publication. Businesses and accountants will need to update their calculations based on these changes.
Article 3: Execution
The provisions of the Communiqué will be enforced by the Minister of Treasury and Finance. It is important that these changes are carefully examined and implemented by all relevant parties.
These regulations aim to offer a new financial structure to the food and beverage industry, especially during the post-pandemic economic recovery period.
SATURDAY, April 27, 2024
Official newspaper
Number: 32529
NOTIFICATION
From the Ministry of Treasury and Finance (Revenue Administration):
VALUE ADDED TAX IN THE GENERAL APPLICATION COMMUNIQUE
NOTIFICATION ABOUT CHANGES
(SERIAL NO: 51)
ARTICLE 1-The phrases “(8%)”, “(10%)”, “(18%) in the section (III/B-2.4.) of the Value Added Tax General Application Communiqué published in the Official Gazette dated 26/4/2014 and numbered 28983. ” phrases have been changed to “(20%)”, the phrase “as of 1/1/2008” in the first paragraph of the section (III/B-2.4.1.) of the same Communiqué has been abolished and the following paragraphs are added after the fourth paragraph of the same section. has been added.
“Since these businesses are, in principle, service businesses, VAT is calculated at the rate of 10% (20% for alcoholic beverages) on the sale of foodstuffs manufactured or procured from outside to customers to be consumed here or outside.
Example 1: (K) Coffee shop sells cakes obtained from (T) business as well as the coffees it prepares itself. The customer who came to the self-service business bought a wet cake along with the coffee he ordered and asked for his orders to be packaged instead of sitting in the business’s area. He also had 100 grams of Turkish coffee brewed. 10% VAT will be calculated on all sales made by (K), who has a cafeteria license.
Example 2: (G) The customer (D), who was eating at the restaurant, bought 1 kg of baklava when leaving the restaurant. The restaurant will calculate 10% VAT on the food service it provides to the customer and on the sale of baklava.
All sales made by these businesses through methods such as sending to the address, pick-up and ordering by phone or online are of the same nature.
Example 3: (A) Patisserie prepared a birthday cake for 8 people in its factory upon the order placed over the phone. The customer stated that instead of having the cake sent to his home address, he would come to the bakery after work and pick up the cake. After work, he purchased 1 kg of cake and 2 bottles of lemonade along with the cake he ordered. 10% VAT will be calculated on the sales of cakes and accompanying food prepared by order of (A), who has a patisserie business license.
On the other hand, sales of foodstuffs made by those who provide food and beverage services to their customers in areas where they can be served such as tables, seating, and counters, although they do not have a business license to open a business or work for food and beverage services, are included in the list number 24 of the list numbered 2007/13033 annex (II) of the BKK. It is within the scope of the third row.
Example 4: (B) Buffet Business, operating on the beach, sells toast, tea and soft drinks to its customers sitting on tables and stools placed in front of its buffet and to those swimming in the sun loungers on the beach, even though it does not have a business or operating license for food and beverage services. (B) Since the Buffet Business actually provides food and beverage services, it will calculate 10% VAT on the sales of ready-made food items procured from outside in addition to the toast and tea it prepares in the buffet.”
ARTICLE 2-This Communiqué shall enter into force at the beginning of the month following its publication.
ARTICLE 3-The provisions of this Communiqué shall be enforced by the Minister of Treasury and Finance.
