Supplying services to Turkey and Australia

4th June 2015

Turkey is considering whether to bring electronically supplied services supplied by non-resident businesses to Turkish consumers within the scope of Turkish VAT.  In principle, such supplies are already taxable in Turkey but, as there is no registration mechanism for non-resident entities and no reverse charge mechanism for consumers, it is not possible to account for the VAT due.  

We understand that discussions are continuing and there is no timetable for the introduction of any new legislation or guidance.  

In Australia their Budget announced that there would be GST due on a range of services supplied to Australian consumers by suppliers based outside Australia.  While many countries are looking to introduce such a mechanism for digital services only, in Australia the proposed measures are not restricted to only to digital products and will include, amongst other things, intellectual property and rights.  

It appears that some form of simplified GST registration/reporting scheme is envisaged and it is possible that, for some supplies, the liability to account for GST might be passed to the customer in Australia.  The changes are planned to take effect on 1 July 2017.   

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