Advantages and Process for Exporters
Export is a trade activity that is of great importance for a country’s economy. In countries with export-based economies such as Turkey, the incentives and advantages provided to exporters are of great importance. VAT refund on exports is one of these incentives and aims to increase competitiveness by offering tax advantages to exporters.
Purpose and Advantages of VAT Refund in Exports:
VAT refund on exports provides partial or full reimbursement of the Value Added Tax (VAT) paid by exporting companies from the purchase of goods and services. This advantageous system offers a number of benefits to exporters:
a) Competitive Pricing: Exporters can offer their goods and services at more competitive prices thanks to VAT refund. Reimbursement of VAT reduces costs, allowing the exporter to gain a price advantage.
b) Cash Flow and Liquidity: Exporters get back the amount of tax they paid in cash with the VAT refund. This, in turn, helps regulate cash flow and increases liquidity. Businesses can continue their activities with more capital and seize growth opportunities.
c) Supporting Exports: Encouraging exports increases a country’s foreign trade volume and supports economic growth. VAT refund contributes to the country’s economy by encouraging exporters to export more.
VAT Refund Process in Exports
The VAT refund process in exports consists of certain steps and it is important for the exporter to manage this process correctly.
a) VAT Refund Application: After exporting, exporters make their applications to the relevant tax offices together with the necessary documents for VAT refund. In the application, documents such as invoices showing the VAT in the period in which the export took place and the export declaration are submitted.
b) Relevant Institution Review: Tax authorities examine the applications and request additional documents when necessary. If this is your first time receiving a VAT refund or if you have been deducted for the first time, the tax office may want to carry out an inspection at your workplace. In the first application, a list of documents containing some documents such as official books and your lease contract may be requested from you. As a result, when it is determined that the application is eligible, the VAT refund process begins.
c) VAT Refund Payment: The approved VAT refund amount is paid to the bank account declared by the exporter. At this stage, it is important that the exporter’s bank account information is correct and up-to-date.
Things to Consider Regarding VAT Refund in Exports
There are some important points to consider in the VAT refund process in exports:
a) Accuracy of Documents: It is important that the documents submitted for VAT refund are complete and accurate. The relevant tax authorities meticulously examine the authenticity of the documents. The absence of errors or inaccuracies in the documents ensures a quick and smooth conclusion of the application.
b) Time Tracking: The VAT refund process in exports is carried out within a certain time frame. Exporters must follow the deadlines of the application process and complete the necessary procedures on time. In the event of a lapse, the VAT refund request may be rejected.
Conclusion: VAT refund in exports is an important incentive mechanism that increases the competitiveness of exporters with the advantages it provides. Exporters get the opportunity to offer products and services at competitive prices, regulate cash flow and increase their exports. Correct document submission and time tracking are important for the successful completion of the VAT refund process.
