VAT-Inclusive vs VAT-Exclusive Prices in Türkiye
Region: TürkiyeHesaplayıcı2 min read
Short answer
A VAT-exclusive price is the amount before tax; a VAT-inclusive price adds the VAT. VAT is always calculated on the exclusive price, so to take VAT out of an inclusive price you divide by (1 + rate), not multiply by the rate. At 20%, an inclusive 3,600 TRY is 3,000 TRY plus 600 TRY VAT.
Formula
VAT-inclusive price = VAT-exclusive price × (1 + rate)
VAT-exclusive price = VAT-inclusive price / (1 + rate)
VAT = VAT-inclusive price − VAT-exclusive price
- rate: the VAT rate as a decimal; 0.20 for 20%, 0.10 for 10%, 0.01 for 1%
- The Turkish rates have applied since 10 July 2023: general 20%, reduced 10% and 1% (VAT Law no. 3065 art. 28; Presidential Decision 7346)
Step-by-step example
Both directions of the same price, at 20%:
- Adding VAT: for 3,000 TRY without VAT, VAT = 3,000 × 20% = 600 TRY.
- VAT-inclusive price: 3,000 + 600 = 3,600 TRY.
- Taking VAT out: for 3,600 TRY with VAT, the VAT-exclusive price = 3,600 / 1.20 = 3,000 TRY.
- VAT inside: 3,600 − 3,000 = 600 TRY.
The two directions meet: 3,000 TRY and 3,600 TRY are the same price without and with VAT.
Common mistake: taking 20% of the inclusive price
20% of 3,600 TRY is 720 TRY, but that is not the VAT inside it. 720 TRY is the VAT on an item whose price without VAT is 3,600 TRY. This mistake overstates the VAT by 120 TRY and gives 3,600 − 720 = 2,880 TRY without VAT, 120 TRY too little. Adding 20% VAT to 2,880 TRY gives 3,456 TRY, not the 3,600 TRY you started with.
Both directions by rate
The same 3,600 TRY at the three rates:
| Rate | If 3,600 TRY is without VAT: VAT | VAT-inclusive price | If 3,600 TRY includes VAT: price without VAT | VAT inside | Wrong way: 3,600 × rate |
|---|---|---|---|---|---|
| 20% | 720.00 TRY | 4,320.00 TRY | 3,000.00 TRY | 600.00 TRY | 720.00 TRY |
| 10% | 360.00 TRY | 3,960.00 TRY | 3,272.73 TRY | 327.27 TRY | 360.00 TRY |
| 1% | 36.00 TRY | 3,636.00 TRY | 3,564.36 TRY | 35.64 TRY | 36.00 TRY |
The wrong way overstates the VAT at every rate. Amounts are rounded to the kuruş; when VAT is taken out, the price without VAT is rounded first and the VAT is the rest, so the two add up to the inclusive price.
Worked example: Adding 20% VAT to 10,000 TRY
VAT amount
2,000 TRY
- Amount without VAT
- 10,000 TRY
- Amount with VAT
- 12,000 TRY
Step by step
VAT amount
VAT = net amount × 20%
VAT = 10,000 × 20% = 2,000
Amount with VAT
gross amount = net amount + VAT
gross amount = 10,000 + 2,000 = 12,000