Contents 15 sections
A foreign SaaS company can have a Turkish VAT obligation even when it has no subsidiary, branch, office or employees in Turkey. When a non-resident supplier provides electronic services for consideration to an individual in Turkey who is not a Turkish VAT taxpayer, the supplier generally enters Turkey's Special VAT Registration for Electronic Service Providers and reports the VAT through VAT Return No. 3—commonly called KDV3.
KDV3 in one sentence
KDV3 is the monthly Turkish VAT reporting route for a non-resident electronic service provider's taxable B2C supplies to individuals in Turkey who are not VAT taxpayers; it is not the return for ordinary Turkish B2B reverse-charge transactions.
This distinction drives the entire compliance design. A subscription sold directly to a Turkish consumer, a licence sold to a VAT-registered Turkish company and a sale made through an app store that acts as merchant of record may produce three different reporting outcomes. Product teams, billing teams and tax teams therefore need one transaction map—not three disconnected assumptions.
When does KDV3 apply?
Under Article 9/1 of VAT Law No. 3065 and the VAT General Application Communiqué, the special regime applies where all of the following conditions are met:
the supplier has no residence, workplace, legal seat or business centre in Turkey;
a service is supplied electronically for consideration;
the customer is a natural person in Turkey who is not a Turkish VAT taxpayer; and
the transaction is taxable in Turkey and is not covered by a specific exemption.
| Supply pattern | Typical Turkish VAT route | Operational question |
|---|---|---|
| Foreign supplier → Turkish consumer | Foreign supplier registers and reports taxable electronic services on KDV3. | Can the supplier prove that the customer is B2C and located in Turkey? |
| Foreign supplier → Turkish VAT taxpayer | The Turkish recipient generally accounts for VAT under the reverse charge through VAT Return No. 2; the supply is not automatically placed on the supplier's KDV3. | Was a valid Turkish tax identity and business status collected and checked? |
| Foreign supplier with a Turkish workplace | If the electronic service is supplied through a workplace in Turkey, ordinary VAT registration and VAT Return No. 1 may apply. | Do local people, infrastructure, contracts or authority create a Turkish workplace? |
| Platform or app-store sale | The contractual seller and platform functions determine whether the provider or intermediary reports the VAT. | Who sets terms, charges the customer, appears on the receipt and owes delivery? |
No turnover threshold appears in the special-registration rule
The Communiqué does not provide an EU-style small-seller threshold for this regime. A foreign provider should therefore assess KDV3 from its first taxable Turkish B2C electronic-service supply rather than wait for revenue to reach an assumed limit.
What counts as an electronic service?
The rule is aimed at services delivered through an electronic environment. For digital businesses, the risk area commonly includes automated or substantially automated access to software, cloud capacity, digital content or online functionality. The commercial label is not decisive; the actual supply must be analysed.
| Often within scope | Needs closer analysis |
|---|---|
| SaaS subscriptions and web applications | Live consulting delivered by a person over video |
| Cloud hosting, storage and computing capacity | A bundle combining software, hardware and substantial professional services |
| Streaming, downloads, games and in-app features | Custom software development with significant human work |
| Automated online advertising and marketplace access fees | Telecommunications, financial or education supplies subject to specific rules |
| Digital licences, access codes and subscription cards tied to a specific service | A multi-purpose voucher that represents payment value rather than a specified service |
A business should document why its product is—or is not—an electronic service. Marketing descriptions such as “platform,” “AI solution” or “managed service” are not substitutes for reviewing how the customer receives the benefit, how much human intervention exists and what the contract actually promises.
B2C versus B2B: the control that prevents double reporting
KDV3 targets supplies to natural persons who are not Turkish VAT taxpayers. A taxable service supplied by a foreign business to a Turkish VAT taxpayer generally follows the reverse-charge mechanism: the Turkish customer declares VAT through VAT Return No. 2. Treating every Turkish sale as KDV3 can therefore create an incorrect charge, while treating an unverified individual as B2B can understate VAT.
A defensible onboarding flow should collect the customer's legal name, billing address, country, Turkish tax identity where business status is claimed and the contracting entity. It should also prevent a user from turning a consumer account into “business” merely by typing a company name.
Recommended evidence hierarchy
Contracting party and verified Turkish tax identity first; billing address and payment data next; technical signals such as IP country as supporting evidence. Turkish KDV3 rules do not state the EU's familiar “two non-conflicting pieces of evidence” formula, so an EU VAT setting should not be copied into Turkey without a local review.
Who is liable when a platform is involved?
The platform agreement matters. The Communiqué places the reporting obligation on the intermediary where the electronic service provider is not clearly identified in the contract and invoice-like documents. It also treats a party as the electronic service provider when that party can charge the customer, set the general terms of the service or bears the obligation to perform it.
Accordingly, a SaaS vendor should not decide liability from the payment flow alone. Review the app-store, reseller or marketplace agreement together with checkout screens, receipts, refund responsibility, pricing control and customer-facing terms. A platform that is merchant of record may carry the consumer VAT obligation; a payment processor that only transmits funds usually does not become the supplier merely because it collects the payment.
How to register for KDV3
Map the supply chain. Identify the contracting supplier, consumer-facing seller, merchant of record, payment collector and refund party.
Separate customer types. Build a verified B2B/B2C status field rather than inferring status only from a product plan or email domain.
Classify the product. Confirm whether it is an electronic service, the applicable Turkish VAT rate and any exemption.
Complete the online registration form. Before the first KDV3 return, the provider completes the form on the Revenue Administration's Digital Service portal.
Receive the special registration. The registration is established in the provider's name with the Large Taxpayers Tax Office, and portal credentials are issued. The Communiqué does not require a separate commencement-of-business notification for this special registration.
Configure billing and reporting. Store Turkish B2C taxable consideration, VAT, currency conversion, refunds and customer evidence by reporting month.
The special regime does not impose a statutory requirement for the KDV3 return to be signed by a Turkish tax professional. That does not remove the benefit of local review, especially where historic periods, platform contracts, mixed B2B/B2C sales or permanent-establishment questions exist.
VAT rate and price calculation
KDV3 does not have its own flat rate. The supplier applies the Turkish VAT rate legally applicable to the underlying electronic service. Under the current general rate schedule, supplies not listed for a reduced rate are subject to 20%. Most ordinary SaaS subscriptions, cloud services and digital access products fall under the standard rate, but specialised content or bundled products should be classified before the rate is coded.
| Pricing basis | Example at 20% | Result |
|---|---|---|
| TRY 100 net | 100 × 20% | TRY 20 VAT; consumer pays TRY 120 |
| TRY 120 VAT-inclusive | 120 ÷ 1.20 | TRY 100 net; TRY 20 VAT |
A global price displayed as tax-inclusive can reduce the supplier's net revenue if Turkish VAT was not built into the original margin. Finance should decide whether Turkish consumer prices are VAT-inclusive and ensure the checkout, terms and receipt communicate that treatment consistently.
Foreign currency, refunds and local input VAT
Foreign-currency subscriptions
KDV3 is reported in Turkish lira. Where the consideration is denominated in foreign currency, the Communiqué requires conversion using the Central Bank of the Republic of Turkey's foreign-exchange buying rate published in the Official Gazette for the date of the taxable event. If the Central Bank does not publish that currency, the current exchange rate is used. A monthly average or payment-processor settlement rate should not replace the required transaction-date method without legal support.
Cancellations, credits and chargebacks
Refunds should be tied to the original customer, supply, taxable amount and VAT. A processor chargeback is not automatically a tax credit: the business needs evidence that the underlying consideration was cancelled or returned and must reflect the correction in the legally appropriate period. Keep credit records and the original transaction link in the tax data set.
Turkish input VAT
The special registration is simplified, but it is not necessarily a gross-output-only regime. The Communiqué permits the portion of Turkish input VAT shown on invoices for goods and services connected with the KDV3 supplies to be deducted under Article 29/1, provided the documents are retained. The invoice, business connection and allocation should be tested before any deduction is claimed.
KDV3 filing and payment calendar
KDV3 uses calendar-month tax periods. The Revenue Administration's current “Return Filing and Payment Periods” table states that the special VAT Return No. 3 for electronic service providers must be filed by 23:59 on the 28th day of the following month, and the tax is paid within the filing period. If the provider has no transaction to report for a month, the Communiqué states that no return is required for that period.
Why some guides still show the 24th and 26th
The consolidated VAT Communiqué retains the historic wording of filing by the 24th and payment by the 26th. The Revenue Administration's current deadline table applies the later 28th-day deadline under Tax Procedure Law Circular No. 149. A compliance calendar should use the current official deadline table and still check for temporary extensions or public-holiday effects each month.
For example, absent an official extension or non-business-day adjustment, September KDV3 activity is included in the September return due by 23:59 on 28 October. The payable VAT is due within the same filing period.
Monthly data and evidence checklist
Customer
Legal name, natural-person/business status, verified tax identity where claimed, billing country and supporting location signals.
Supply
Product SKU, service description, supply period, taxable-event date, rate code and exemption reason if any.
Value
Gross charge, discount, tax-inclusive or exclusive status, VAT amount, transaction currency and required TRY conversion.
Platform
Merchant-of-record status, platform statement, fees, refund owner and evidence of who appears as supplier.
Reconcile the KDV3 population to billing-system sales, payment-processor settlements and the general ledger. Differences caused by fees, timing, foreign exchange, free trials, credits or B2B reclassification should be explained and retained. The special regime removes the Turkish statutory bookkeeping obligation described in the Communiqué, but it does not remove the need for auditable transaction records and supporting documents.
KDV3 is not Digital Services Tax or corporate income tax
| Regime | What it taxes | Why the analysis is separate |
|---|---|---|
| KDV3 | VAT on in-scope B2C electronic services supplied by a non-resident | Transaction-level consumption tax; special registration has no stated turnover threshold. |
| B2B reverse-charge VAT | Imported services received by a Turkish VAT taxpayer | The Turkish recipient generally reports through VAT Return No. 2. |
| Digital Services Tax | Gross revenue from separately defined digital services, subject to that law's scope and thresholds | It is not VAT, uses a different return and has its own enforcement provisions. |
| Corporate income tax / PE | Business profits attributable to a Turkish taxable presence or otherwise taxable under domestic law and treaty rules | KDV3 registration does not by itself decide whether a permanent establishment exists. |
For the wider indirect-tax framework, see our Turkey VAT guide. If local people, servers, contracting authority or a fixed business location are involved, review the separate permanent establishment analysis.
Do not import an access-ban claim into KDV3
For KDV3 non-compliance, the VAT Communiqué expressly points to the penalty provisions of the Turkish Tax Procedure Law. The website-access restriction process often mentioned in digital-tax commentary belongs to the separate Digital Services Tax regime. Penalties, late-payment consequences and any additional enforcement exposure should be identified under the correct statute, not blended into one warning.
A practical KDV3 implementation plan
Scope: list products, entities, domains, app stores, resellers and checkout paths that can reach Turkish customers.
Contract: identify the legal supplier and merchant of record for each channel.
Tax determination: establish product classification, rate, exemption logic and B2B/B2C validation.
Registration: complete the special-registration process before the first return.
Billing: configure Turkish VAT-inclusive or VAT-exclusive pricing and customer receipts.
Close: extract, convert, reconcile and review monthly data; document adjustments and platform sales.
Governance: monitor official rate, deadline and product changes; keep ownership clear between finance, tax, billing and engineering.
Need a KDV3 exposure review?
We can review your customer journey, contracts, merchant-of-record model and historic Turkish sales, then build a registration and monthly filing process appropriate for your SaaS or digital-service business. Explore our Turkish tax advisory services.
Official sources
Turkish Revenue Administration — Communiqué No. 17 Amending the VAT General Application Communiqué
Turkish Revenue Administration — Return Filing and Payment Periods
Turkish Revenue Administration — Digital Service / VAT Return No. 3 Portal
This guide provides general information and is not a transaction-specific legal or tax opinion. Product classification, customer status, contracts, establishment risk and current portal practice should be checked for the facts of each business.
Share this guide with your network
Choose a platform and share the article with its title, link and preview image ready.
Need advisory on this topic?
Contact us by WhatsApp or phone, or submit your request using the short form below.
