Turkish IT company with foreign clients: contracts, invoices, banking and VAT
For an IT company in Turkey, a customer abroad, payment currency and use of the service abroad are separate facts. VAT Law No. 3065, Article 12(2), requires the relevant service to be for a customer abroad and used abroad. The customer definition concerns residence or business location, rather than nationality. These conditions must be checked for the particular service; foreign currency alone does not establish an exemption. Prepare the contract, result description, evidence of performance and use, invoice and payment chain. The bank's review of a payment and the tax classification of the service answer different questions. This page sets no VAT rate or refund procedure.
Who this guide helps
- An owner or director of a Turkish IT company that provides services to clients outside Turkey.
- An accountant or coordinator assembling a document set for the bank and for the tax qualification of the service.
Scope and boundaries
- This page does not state tax rates, relief percentages, or the procedure and deadlines for VAT refunds: those need current rules and the facts of the specific transaction.
- This page does not state that any particular service, including SaaS, is exempt from VAT: the conditions in Article 12(2) are described here as necessary, not exhaustive.
- This page does not cover technopark incentives and contains no client stories.
Four separate questions
For a service to a foreign client it helps to answer four questions separately and not to substitute one for another. A foreign currency or a foreign payer bank does not by itself answer either of the first two.
VAT Law No.3065, Article 12(2) · VAT Law No.3065, Articles 11(1)(a), 12
- Who is the client: the law requires a service to a foreign client.
- Where is the result used: the law separately requires use of the service abroad.
- Who pays, and through whom: the payer and a payment intermediary may differ from the client, and you should be able to explain that to the bank.
- What is the tax qualification: the law provides an exemption for relevant export supplies and services to foreign customers; whether it applies is checked on the facts, not by the invoice currency.
VAT Law No.3065, Article 12(2) · VAT Law No.3065, Articles 11(1)(a), 12
Article 12(2) defines a customer abroad by residence, workplace, legal seat and business centre abroad; it also includes an overseas branch of a domestic firm operating independently in its own name. Customer nationality is not a substitute for this definition. Where the service is used is a separate condition.
Service check table
This table is a recommended working check. Legal provisions are identified separately with source links; the document set depends on the specific task.
| Question | What to document | What the sources say | What not to assume |
|---|---|---|---|
| Subject of the contract | A description of the service, the scope of work and the expected result | Describing the subject of the contract is recommended | That the generic label 'IT services' is enough for the bank or for tax qualification |
| Client | Who the client is under the contract and the invoice, and its registration data | The law requires a service to a foreign client | That a foreign currency or a foreign payer bank by itself makes the client foreign |
| Use of the result | Where the result is used and what evidences it | The law separately requires use of the service abroad | That a foreign client automatically means use abroad |
| Performance | Acceptance acts, milestones, correspondence, confirmations | Describing performance is recommended | That an invoice without evidence of performance is sufficient |
| Invoice and currency | Client, subject, amount and currency consistent with the contract | The exemption relates to relevant export services to foreign customers | That every invoice in foreign currency is automatically exempt from VAT |
| Source of payment and intermediary | Who actually pays, from which account, and whether a payment intermediary is involved | A reply to the bank is built around its request: transaction, contract or invoice, performance, payment chain | That the payer is always the client |
| Tax qualification | The facts listed above, passed to your accounting provider | The exemption and the conditions in Article 12(2) are checked on the facts of the transaction | That a rate, a refund or the exemption can be named without analysing the facts; this page names none |
VAT Law No.3065, Article 12(2) · VAT Law No.3065, Articles 11(1)(a), 12
Document check sequence
Use the following sequence to check the documents.
- Describe the service and the result the client receives in one sentence.
- Record who the contracting party is and to whom the invoice is addressed.
- Record where the result is used and which documents evidence that.
- Collect the evidence of performance and cross-check it with the contract and the invoice.
- Describe the payment chain: payer, account, intermediary and payment purpose.
- Pass the set to your accounting provider for a separate tax qualification based on the facts.
VAT Law No.3065, Article 12(2) · VAT Law No.3065, Articles 11(1)(a), 12
The bank
When identifying a company, the bank establishes its registration data, its activity and the details of the person with authority to represent it. During an ongoing relationship, the bank, as an obliged entity, monitors whether transactions match the client's profile and sources of funds and keeps client information and records current. If the bank asks about a payment, RelocationTR recommends building the reply around that request: transaction, contract or invoice, performance, payment chain. This does not guarantee that further questions will not arise.
Sources and limits of this page
VAT Law No. 3065, Article 12(2)(a)–(b): for an export of services, a service to a foreign client and use of the service abroad are required. These are necessary conditions, not a complete qualification or refund test. Article 11(1)(a), read with Article 12, provides an exemption for relevant export supplies and services to foreign customers.
VAT Law No.3065, Article 12(2) · VAT Law No.3065, Articles 11(1)(a), 12
MASAK regulation, Article 7(1)–(3) and Article 19(1): when identifying a company, the bank establishes its registration data, activity and the details of the person with authority to represent it; during an ongoing relationship the bank, as an obliged entity, monitors whether transactions match the client's profile and sources of funds and keeps client information and records current.
The table and the check sequence are RelocationTR editorial recommendations, not a list of statutory requirements.
Common mistakes
- Treating an invoice in foreign currency as automatically exempt from VAT.
- Evidencing only that the client is foreign and not documenting where the result is used.
- Not explaining why the payer or intermediary differs from the client.
- Describing the service differently in the contract and in the invoice.
- Answering the bank with general explanations instead of a chain built around the specific transaction.
VAT Law No.3065, Article 12(2) · VAT Law No.3065, Articles 11(1)(a), 12
Discuss your documents and task
If you want to check how far your contract, invoices and payment chain agree with each other, send us a description of the service and a list of documents, and we will help assemble a set for your accounting provider and for the bank.
Discuss the taskFrequently asked questions
Is a foreign client enough for a service to count as an export?
No. The VAT Law (Article 12(2)) requires, for an export of services, a service to a foreign client and use of the service abroad. These are necessary conditions, not a complete test, so the facts of use of the result should be documented separately.
Is an invoice in foreign currency exempt from VAT?
No such conclusion can be drawn. The law provides an exemption for relevant export supplies and services to foreign customers, and whether it applies is checked on the facts of the transaction, not by the invoice currency. No rates are given on this page.
What should an IT services contract describe?
RelocationTR recommends describing the subject of the contract, the client, performance, use of the result, the invoice and the source of payment. This is an editorial recommendation, not a legal requirement.
What does the bank examine in payments from foreign clients?
When identifying a company, the bank establishes its registration data, its activity and the details of the person with authority to represent it, and in continuing relationships it checks that transactions are consistent with the client's profile and sources of funds. A reply to a request about a transaction is best built as a chain: transaction, contract or invoice, performance, payment chain.
Primary sources
Prepared by RelocationTR. The dates below refer to checks of the cited source provisions.
- MASAK, Article 7(1)–(3)Provision checked: 2026-10-01
- MASAK, Article 19(1)Provision checked: 2026-10-01
- VAT Law No.3065, Article 12(2)Provision checked: 2026-10-01
- VAT Law No.3065, Articles 11(1)(a), 12Provision checked: 2026-10-01