How to Prepare the Deductible VAT List in Turkey, and Who Must Submit It?

The deductible VAT list (indirilecek KDV listesi) is the electronic list, submitted through the Internet Tax Office, in which a taxpayer requesting a VAT refund shows one by one the purchase documents it deducted in its VAT return for the period for which the refund is requested. Not every VAT taxpayer submits this list. The list is required only when there is a refund request, and it is one of the most fundamental parts of the refund file.

By looking at this list, the tax office sees which invoices make up the total deductions in the return. Each line in the list is compared with the seller’s declaration by the VAT Refund Risk Analysis (KDVİRA) system. For this reason, if the list is prepared carelessly, the refund request comes back with a deficiency letter at the very first check.

What is the deductible VAT list, and what does it include?

The deductible VAT list is a breakdown of all purchase documents recorded as deductions in the period to which the refund relates. The list includes documents whose VAT is deducted, such as purchase invoices, and retail sales receipts and cash register receipts accepted as expense documents. The purpose is to show the source of the “deductions” total in the return at the document level.

Each line carries the invoice and seller information identifying a document and the VAT amount on that document. The column structure is set by the Revenue Administration (GİB) and updated from time to time. For this reason, we recommend preparing the list each period using the current sample Excel file in the Internet Tax Office.

If you have not yet clarified how VAT works in general and the logic of output and input VAT, you can first read our what is VAT and how is it calculated article. This article builds on that foundation and explains the document side of the refund file.

The difference between deductible VAT and VAT incurred

Deductible VAT (input VAT) is the tax you paid for goods and services purchased in a period and deducted from output VAT in the return. In other words, it covers all deductions of the period: rent, energy, raw materials, consulting, fixed assets. In the refund file, however, only part of this total matters.

What is VAT incurred?

VAT incurred (yüklenilen KDV) is the VAT embedded in a transaction giving rise to a refund right (for example, exports or sales subject to a reduced rate), which you paid in order to carry out that transaction. The raw materials of the exported product, subcontracted services purchased for its processing, and the depreciation share of the machinery used in production fall within this scope. In short, deductible VAT describes the entire period, while VAT incurred describes the share of the transaction subject to the refund.

Which purchases does the list of VAT incurred cover?

Under the VAT General Implementation Communiqué, the list of VAT incurred is a document-by-document breakdown of the taxable purchases underlying the calculation table of VAT requested for refund. Each line also states which input the amount comes from: finished goods, raw materials, auxiliary materials, service purchases, general expenses or depreciable economic assets (ATİK). The VAT directly embedded in the transaction and the share of general expenses and ATİK allocated to the transaction are shown separately in the list.

The role of the four lists and tables in the refund file

This list alone does not make up a refund file. The common documents section of the Communiqué defines four basic lists and tables that are required in different combinations depending on the type of refund. The table below summarizes what each of them proves.

What are the sales invoice list and the calculation table for?

The sales invoice list shows the sales invoices, self-employment receipts and similar documents for the transaction giving rise to the refund right. With this list, the tax office checks that the transaction actually took place and matches the tax base in the return table. The calculation table, on the other hand, summarizes the refund amount requested on a single page, based on the lines in the list of VAT incurred; its template appears in the Communiqué as ANNEX:19.

Who submits the deductible VAT list, and who does not?

Taxpayers requesting a VAT refund submit the list. The Communiqué states this explicitly: if there is no refund request, the deductible VAT list, the list of VAT incurred and the calculation table are not submitted to the tax office unless otherwise provided. A company that prefers to use its VAT carried forward through deductions in subsequent periods does not need to submit this list.

There are a few special cases. This list is not required for the cancellation of tax deferred because of deliveries with export registration. If there is more than one transaction giving rise to a refund right in the same period (for example, both exports and sales at a reduced rate), the list is submitted once, not separately for each transaction. We covered the transactions that give rise to a refund and the differences between methods in our What is a VAT refund and when can it be claimed article.

Which periods’ lists are required?

The general rule is the deductible VAT list for the period in which the transaction giving rise to the refund right was declared. For some refund types, however, previous periods are also required. Under the Revenue Administration’s (GİB) VAT General Implementation Communiqué, manufacturers may request a refund of up to 10% of the export value for goods they export directly, regardless of the VAT they incurred, limited to the VAT carried forward. Manufacturers choosing this route are also required to submit lists for the last twenty-four periods before the period in which the export was declared.

This 24-period list is submitted once if it covers the same periods. If VAT was payable in one of the previous periods, it is sufficient to submit the lists for the periods after that period. A similar rule applies to in-year offset requests for transactions subject to a reduced rate: for new requests made after a request has been concluded in the current year, the lists for the intervening periods are also required.

How to prepare the deductible VAT list in 5 steps

Technically, the list itself is an Excel file; the difficulty is ensuring that every line in it is consistent with the return, the books and the seller’s declaration. At Akal CPA, in refund files we start preparing the list not after the return but while closing the period. The sequence below is the method that requires the fewest corrections in the field.

• Step 1: Match the books with the documents. The right to deduct is exercised in the period in which the document is recorded in the statutory books, provided that the calendar year following the calendar year in which the taxable event occurred is not exceeded (Article 29/3 of Law No. 3065); include in the list only documents entered in the books and deducted in that period. If you record via accounting vouchers, also take into account that under Article 219 of the Tax Procedure Law (VUK), the vouchers must be entered in the main books within 45 days at the latest.
• Step 2: Enter each document on a separate line. Under the Communiqué, every document, including those below the invoicing threshold, is recorded separately in the list. If you received ten invoices from the same seller in the same month, do not combine them into a single line; open ten separate lines.
• Step 3: Separate the status of receipts. Since the VAT on retail sales receipts and cash register receipts for expenses accepted as expense documents can be deducted, these documents are included in the list. The VAT on expenses not accepted as expense documents cannot be deducted; these receipts are not included in the list either.
• Step 4: Compare the total with the return. The list total must match the deductible VAT amount in the return for the relevant period. If there is a difference, identify item by item which documents it comes from before submitting.
• Step 5: Submit through the Internet Tax Office and keep the receipt. The list is uploaded electronically in the format prescribed by the Revenue Administration (GİB) and is not submitted separately on paper. The “Internet Tax Office List Receipt” generated after submission is the document attached to the tax office’s processing slip in place of the lists; keep it in your file.

The work is not over once the list is submitted. KDVİRA cross-checks the purchases in the list against the sellers’ declarations, and a VAT Refund Control Report is generated as a result. If the tax office identifies deficiencies in the documents, it notifies you in writing. Under the Communiqué, in certain offset requests, for those who complete the deficiency within 30 days of service of the letter, the offset is made based on the petition date.

Common list mistakes we see in the field

Most of the problems we see in refund files stem not from interpretation of the legislation but from list discipline. The ones we encounter most often are:

• Opening aggregate lines. Combining a supplier’s monthly invoices into a single line disrupts KDVİRA matching and violates the document-by-document recording rule.
• Adding a previous year’s document without checking. If the VAT on an invoice whose deduction period has expired appears in the list, both the deduction and the refund calculation have to be corrected.
• Putting all purchases of the period in the list of VAT incurred. This list is limited to the transaction giving rise to the refund right; if unrelated expenses are included, the refund amount is inflated and corrected at the check.
• Using an old Excel template. When GİB updates the column structure, an upload made with the old file returns an error or goes through with missing information.
• Noticing a problematic supplier too late. Purchases from sellers that have not filed returns or about which there is an adverse report are assessed separately in the control report. Seeing this while preparing the list gives you more time to respond.

Can the list be submitted later if the refund deadline has passed?

No, a request not initiated because of a missing list cannot be saved after the deadline has passed. For transactions under a full exemption, the refund request must be made by the end of the second calendar year following the period in which the transaction took place. For transactions subject to a reduced rate, the request must reach the tax office together with its documents by the end of the year following the year in which the transaction was made.

One of the examples in the Communiqué illustrates this risk well: the request of a taxpayer who declared a reduced rate refund on time but entered the list of VAT incurred in the system after the deadline is rejected. On the other hand, if the lists were submitted on time and only their content is incomplete, these deficiencies can be completed even after the deadline has passed. In short, submitting the list on time comes before submitting it perfectly.

Sample scenario: lists of an exporting manufacturer

For example, consider a fictitious limited liability company in Ankara that manufactures and exports machine parts. The company exports in the March period, also sells domestically in the same month and wants a refund. The first question for this company is whether to request the refund based on VAT incurred or based on the export value.

If it chooses the VAT incurred route, it prepares the March period deduction list, the list of VAT incurred showing the share of raw materials, subcontracting and general expenses for the exported parts, the calculation table, and the sales invoice list containing the export invoices. If it chooses the refund route based on the export value, it does not calculate VAT incurred, but it also submits the retrospective deductible VAT lists. Which route is suitable depends on the company’s VAT carried forward and the orderliness of its past records; before deciding, the two options should be compared in figures.

Who should take on preparing the lists?

Refund lists are the monthly accounting records as reflected in the refund file. When records are kept regularly during the period, the list is an export job of a few hours; when they are not, it becomes the longest stage of the refund process. We consider it important that the bookkeeping system is set up with a possible refund in mind.

As part of our our general accounting services , the Akal CPA team of experts handles bookkeeping, return reconciliation and the preparation of refund lists within the same team. For other guides on returns, refunds and bookkeeping, you can review the Tax Legislation category . The official text of the rules on which the lists are based can be found in the VAT General Implementation Communiqué .