To calculate VAT in Turkey, multiply an amount excluding VAT by 1.20 to get the inclusive total, and divide a VAT-inclusive amount by 1.20 to pull the VAT out. The standard VAT (KDV) rate is 20%. Software, design and advertising quotes are often written "excluding VAT", so getting these two calculations right is the first step in comparing quotes.
How do you add VAT to an amount excluding VAT?
The formula is simple: VAT = base amount × rate, and VAT-inclusive total = base + VAT. The base is the amount before VAT. At the standard 20% rate, a 10,000 TRY service carries 2,000 TRY of VAT and the invoice total is 12,000 TRY.
There is a shortcut: multiplying the VAT-exclusive amount by 1.20 gives the total straight away. 8,000 × 1.20 = 9,600 TRY. If a quote says "8,000 TRY + VAT", you pay 9,600 TRY; the 1,600 TRY difference is not a service fee but tax passed to the state.
How do you separate VAT from a VAT-inclusive amount?
This is where the most common mistake happens. Taking 20% of a VAT-inclusive 12,000 TRY gives the wrong answer (2,400 TRY), because the 20% was added on top of the base, not on top of the total. The correct step is to divide the total by 1.20: 12,000 ÷ 1.20 = 10,000 TRY base, and the 2,000 TRY difference is the VAT.
A mental shortcut: at 20% VAT, one sixth of the VAT-inclusive amount is the VAT. One sixth of 12,000 is 2,000. The shortcut only holds for 20%; at a 10% rate the VAT is one eleventh of the inclusive amount.
| Excl. VAT (base) | VAT 20% | Incl. VAT total |
|---|
| 5,000 TRY | 1,000 TRY | 6,000 TRY |
| 8,000 TRY | 1,600 TRY | 9,600 TRY |
| 10,000 TRY | 2,000 TRY | 12,000 TRY |
| 25,000 TRY | 5,000 TRY | 30,000 TRY |
Instead of doing this by hand, you can use our VAT calculator; it adds and separates VAT on one screen and supports 1%, 10%, 20% and custom rates.
What are the VAT rates in Turkey?
The standard rate is 20%; it was raised from 18% in July 2023 by Law No. 7456. Reduced rates of 10% and 1% apply to some goods and services. Which item falls under which rate is set by the lists attached to the VAT Law and by presidential decisions; because those lists change from time to time, check the Revenue Administration or ask your accountant when deciding item by item.
One distinction matters here: the item decides the rate, not the parties' preference. You cannot negotiate the rate down in a quote; you can only ask whether the correct rate was applied. Where withholding (tevkifat) applies, the buyer declares part of the VAT, so the invoice total and the amount actually paid can differ, and the accountant works that out.
Three common mistakes when you calculate VAT in Turkey
The first mistake is taking 20% of the inclusive amount, covered above. The second is mixing up rates: for the same 10,000 TRY, VAT at 10% is 1,000 TRY and the total 11,000 TRY, while at 1% VAT is 100 TRY and the total 10,100 TRY. Choosing the wrong rate makes a difference, so settle the rate of the item before you calculate.
The third mistake is calculating a quote made of different items on one total. Two items in a quote may fall under different rates; VAT is calculated for each item and then summed. For example, if a 20,000 TRY service item and a separately invoiced 10,000 TRY item do not carry the same rate, applying one rate to 30,000 TRY would be wrong. Listing items separately in a quote is therefore not only about transparency; it is also needed for a correct invoice.
What do you pay when a quote says "excluding VAT"?
In every quote that says "excluding VAT" the final amount grows once the rate is added. For digital services, the payment plan, invoice and budget all run on that total. If you are a company that can deduct VAT (a VAT-registered business), VAT is not a separate cost for you; for a buyer who cannot deduct it, the real cost is the VAT-inclusive amount.
So when you compare two quotes and one is written VAT-inclusive and the other VAT-exclusive, bring both to the same base first. A 20,000 TRY VAT-inclusive quote is cheaper than a 17,000 TRY + VAT quote (20,400 TRY), even though it looks the other way round at first glance. Keep the scope identical as well; we cover the rest of price comparison in our website prices guide.
How do you account for VAT in a website or ad budget?
There are two ways to plan. The first is to set the total budget VAT-inclusive and divide by 1.20 to find the base: of a 60,000 TRY digital budget, 50,000 TRY is the service fee and 10,000 TRY is VAT. The second is to set the service fee and multiply by 1.20. Whichever you choose, use the same method across all quotes.
Ad spend has one more point to watch: the amount paid to the ad platform and the agency's service fee are separate items, and VAT is calculated on each separately. We prepare our web design and ad management quotes so that this split is visible; to get a quote for your scope, use our quote wizard.
A small warning: if you set your budget VAT-inclusive but ask the provider for a "VAT-exclusive" quote, the two figures do not match and the total ends up 20% above what you expected. Before asking for a quote, settle which base your own budget is written on; that one sentence prevents most "the quote came in higher than I expected" misunderstandings.
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