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The tax due on imported goods is not a single item. First the customs value of the goods is established; customs duty by GTİP, any additional customs duty and other taxes are calculated on that value; and finally VAT is charged on the total of all these amounts.
Because the calculation runs in this order, a small mistake grows as it goes: freight left out of the value understates both the customs duty and the VAT. Below we go through the steps in order, with their legal basis.
First, the customs value
The basis for customs duty is the customs value of the goods. Under Customs Law No. 4458 the value is essentially the transaction value, the price actually paid or payable, to which the transport and insurance costs up to the port or place of entry into Türkiye are added (Art. 27). Transport and insurance costs after arrival at the place of entry are not included, provided they are shown separately from the price (Art. 28).
In practice this means the value is built close to a CIF basis. If the delivery term is FOB you add freight and insurance yourself; if it is CIF the invoice price already includes them. Foreign-currency amounts are converted into Turkish lira at the Central Bank of the Republic of Türkiye selling rate in force on the date the customs debt arises (Art. 30).
Then customs duty and additional customs duty
The duty rate is set from the Turkish Customs Tariff Schedule and the Import Regime Decree according to the GTİP and origin of the goods. For goods from countries covered by a free trade agreement or the customs union, preferential treatment can apply with documents such as the EUR.1 or A.TR.
For some codes an additional customs duty (İGV), listed in the annexes to the Import Regime Decree, is also charged; its rate can vary with the country of origin and it too is calculated on the customs value. Certain products and origins may also be subject to trade-defence measures such as anti-dumping or countervailing duties, and steel products are an area where such measures are common.
Special consumption tax and other items
Goods on the special consumption tax (ÖTV) lists, such as vehicles, fuel, tobacco products and some consumer durables, also attract ÖTV at import. There are smaller items as well, such as the fixed stamp duty on the declaration; these amounts are updated every year.
Steel products are not on the ÖTV lists, so in steel imports the calculation is usually decided by customs duty, any additional customs duty and VAT.
Finally, import VAT
Under Article 21 of VAT Law No. 3065, the VAT base on import is the sum of: the value on which customs duty is assessed; all taxes, duties, fees and levies paid on import; and other expenses incurred up to the registration date of the customs declaration, together with exchange-rate differences. In other words, VAT is calculated on top of the customs duty and the additional duty.
The general VAT rate is 20 per cent; 10 per cent or 1 per cent applies to some goods. VAT paid on import can be deducted where the conditions are met, whereas customs duty and additional customs duty become part of the cost.
Worked example
In the table below the customs duty and additional duty rates are assumed purely to show the method; the real rate is looked up in the tariff according to the GTİP and origin of the goods. The general VAT rate of 20 per cent is used.
| Customs value (price + freight and insurance to the place of entry) | TRY 100,000 |
|---|---|
| Customs duty (assumed: 5%) | TRY 5,000 |
| Additional customs duty (assumed: 10%) | TRY 10,000 |
| Other expenses up to registration (assumed) | TRY 2,000 |
| VAT base | TRY 117,000 |
| VAT (20%) | TRY 23,400 |
| Total tax payable (duty + additional duty + VAT) | TRY 38,400 |
Without the additional duty, the VAT base for the same consignment would fall to TRY 107,000 and the total tax to TRY 26,400. The difference is TRY 12,000, not 10,000, because the additional duty also enters the VAT base. When comparing origins, look not only at the additional duty itself but also at its effect on VAT.
When duty is calculated on goods in a bonded warehouse
For goods in a bonded warehouse, the tax liability arises not when the goods enter the warehouse but when the declaration for release into free circulation is registered. Both the exchange rate used to convert the value and the rates applied are those of that date.
This is both the advantage of duty deferral and the point to watch: payment is postponed until the goods are sold, but changes in exchange rates and the tariff during storage feed into the bill. With partial withdrawals, each withdrawal is taxed under its own declaration, at the exchange rate and rates of its own date.
