Deposits and invoices: when a hotel documents an advance payment

In Türkiye a hotel deposit (kapora, avans) does not need an invoice on the day it is collected: VAT arises when the accommodation service is performed. If the hotel issues an invoice for the advance anyway, VAT is calculated on the amount shown. Accommodation tax follows the service, not the money.

The guest pays in March for a stay in August. The money is in the bank, the reservation is in the system, and no service has been performed. The front office asks accounting for an invoice, and accounting asks a harder question: an invoice for what, exactly? This article separates the two clocks inside every advance, explains when a hotel deposit invoice in Türkiye is required and when it is optional, and shows how the final invoice nets the advance without taxing it twice.

Money received, service not yet given: what is the actual question?#

A hotel deposit raises two separate questions that are often mixed into one: whether a document must be issued now, and what tax follows if one is. They have different answers, from different laws.

Define the term once. A kapora or avans is money collected before the accommodation service is performed, to hold a room or a rate. It is not revenue yet, and it is not a completed sale.

Two clocks run on every advance. The money clock starts the day the card is charged or the transfer lands. The service clock starts the night the guest actually sleeps, and closes on the check-out day that ends the stay. The VAT clock is set by Article 10 of the VAT Law (Law No. 3065): the taxable event is the delivery or the performance of the service, or, where an invoice is issued before the service, the issue of that invoice, limited to the amount shown on it. The accommodation tax clock is set separately, by the third paragraph of Article 34 of Law No. 6802: the taxable event is the provision of the taxable service.

The document duty does not disappear. In Türkiye every stay involves a payment, a fiscal document (an invoice or an e-document), a guest identity notification (KBS) and personal data (KVKK). The open question is timing and which document, not whether the sale is documented at all.

Write the hotel's own rule down before the season: who decides whether an advance is invoiced, at what amount, and who records the decision. A rule that lives only in one accountant's memory breaks when that person is on leave. If you want the guest's side of the same transaction, see how a hotel takes a deposit.

Does a hotel deposit need an invoice when it arrives?#

No. On the reading the Revenue Administration set out in a 2011 ruling, an advance collected before the accommodation service is outside the scope of VAT and needs no invoice, because the accommodation invoice is issued after the service.

The ruling is İstanbul Tax Office Directorate, 9 June 2011, No. B.07.1.GİB.4.34.19.02-019.01-689 (opens in a new tab), given to a hotel whose guests abroad paid advances by credit card at the time of booking. Its reasoning, in order: Article 10 of the VAT Law puts the taxable event at the performance of the service; for accommodation, VAT is calculated when the accommodation is performed; advance collections taken before the service to secure a reservation fall outside the scope of VAT; and because the accommodation invoice must be issued after the service, no invoice is needed for the advance.

Know what the ruling is and is not. It is the administration's reasoned answer to one taxpayer on one fact pattern. It shows how the text is read. It is not a statute, and a different fact pattern can produce a different answer.

The reporting side matters even without an invoice. The same ruling says credit-card advances are shown, in the period they are collected, on the VAT return line for credit-card collections (line 45 of the 1 No.lu return at the time). Line numbering changes; confirm the current line with your accountant.

What the hotel must still do on the day: record the money against the reservation, keep the reservation record and the payment record, and make sure the invoice follows the service within the period Article 231(5) of the Tax Procedure Law allows. The trap is treating silence as permission to leave the money undocumented anywhere. No invoice does not mean no record. The advance must be traceable from the bank statement to the reservation to the final invoice.

If the hotel invoices the advance, when does VAT arise?#

VAT arises on the date of the advance invoice, on the amount shown on it, because Article 10 of the VAT Law moves the taxable event to the invoice when the invoice comes before the service.

The mechanism exists so that a hotel cannot issue a document demanding payment and then defer the tax. The invoice itself becomes the taxable event, limited to the amount printed on it. That VAT belongs to the period the advance invoice is dated in, not the period of the stay. A December advance invoice for an August stay puts VAT into December.

When the stay happens, the hotel must not charge VAT a second time on the same money. The final invoice shows the full price, the advance already invoiced, and the VAT split between the two documents. If the stay never happens, a correction is needed on the document already issued. How that correction is made depends on the document type and the period, and it is an accountant's call, not a front office one.

Article 231(5) of the Tax Procedure Law (opens in a new tab) sets the outer limit in the other direction: an invoice is issued within at most seven days of the performance of the service. Since Law No. 7318 (2021) the Ministry of Treasury and Finance may shorten that period, or require the invoice at the moment of service, by sector or by type of service. The same article carries the sanction that makes the deadline real: an invoice not issued within the period is deemed never to have been issued. A late invoice does not repair a missing one.

No invoice on collection versus invoice on collection#

When does accommodation tax arise on a stay that has not happened yet?#

When the service is provided, and nothing else moves it: the Accommodation Tax Implementation General Communiqué states that early collection and early invoicing do not trigger the tax.

The base rule sits in the third paragraph of Article 34 of Law No. 6802: the taxable event is the provision of the taxable service. The Accommodation Tax Implementation General Communiqué (opens in a new tab) (Resmî Gazete, 14 December 2022, No. 32043) works out what that means in practice.

Collection timing is irrelevant. Whether the price is collected before the service, after it, or not at all does not change the taxable event. An invoice or similar document issued before the service does not trigger it either. This is the sharpest difference from VAT: an early invoice moves VAT, and leaves accommodation tax where it was.

Agency sales have their own sentence: no tax arises when the room is sold to or by the agency; it arises when the service is provided to the guest. A stay that spans more than one monthly tax period falls in the period of the check-out day if the check-out date is known before the service. If it is not known, the taxable event is deemed to occur on the last day of each period, for the days served in it.

Free stays are not outside the tax. Stays given to the operator, to relatives or to staff, or as promotions or gifts, also trigger it. Staff sleeping in quarters reserved for their own use does not. What this means for the deposit file: the reservation record must carry the arrival and departure dates and the guest names, because those are what the tax follows, not the payment date.

How does the final invoice net the advance?#

The final invoice states the full price of the stay and shows the advance as a payment already received against it, so the guest sees one sale and the hotel declares one revenue.

The guest account carries the stay. Charges are posted to it, the advance is posted to it as a payment when the guest arrives or when the reservation is opened, and the balance at check-out is what is still owed. The invoice is not the guest account: the account is the working record, the invoice is the fiscal document issued after the service, and its total must match the charges, not the balance. For the vocabulary of posting and routing, see front office terms explained.

Show the advance explicitly: date received, amount, and the number of the advance invoice if one was issued. A deduction with no reference is the line an inspector asks about first. Accommodation tax is calculated on the full price of the service, not on the remaining balance. A guest who prepaid everything still generated the same tax as a guest who paid at the desk.

If an advance invoice was issued and VAT declared on it, the final invoice must reference it so the same amount is not taxed twice. Two documents, one service, one total tax. Reconcile before the guest leaves: the day's revenue report, the guest account and the invoice total should agree. A difference found at month end is a correction; a difference found at the desk is a question.

What happens to the advance when a stay is cancelled?#

There is no settled published answer for hotels: no Revenue Administration ruling on cancellation fees, no-show charges or retained deposits in accommodation was found in the rulings the administration publishes under the VAT Law, the Tax Procedure Law and the Expenditure Taxes Law, which covers accommodation tax. The treatment has to be agreed with the hotel's accountant case by case.

The general frame still helps. If no service is performed, the VAT taxable event under Article 10 does not occur. Money the hotel keeps after a cancellation may be characterised as something other than consideration for accommodation, and that characterisation is the accountant's decision.

If an advance invoice was issued and VAT declared, a cancellation leaves a document standing for a service that will not happen. Correcting it depends on the document type and the period, and it is not something the front desk should improvise. Write the terms into the record, not only into the contract: the cancellation date, the amount retained, the reason, and the correspondence with the guest. If the treatment is ever questioned, that file is the evidence.

Do not silently carry a retained deposit into a future stay's invoice. It looks tidy and it merges two events that may need separate documents. On the accommodation tax side, a cancelled stay is a stay that was never provided, so the tax question and the refund question travel together. Keep them in one file, and read accommodation tax on invoices, refunds and receipts for that side.

What changes when an agency or tour operator pays the advance?#

For accommodation tax, the agency stage is not taxed at all: the communiqué says no tax arises when the room is sold to or by the agency, and it arises when the service is provided to the guest.

Read the sentence carefully. It does not exempt the stay. It moves the taxable event past the agency transaction to the moment the guest is served. So an agency advance is not the accommodation tax event, and neither is the agency's own sale. The hotel's tax file must be able to point from the agency payment to the individual reservations and the guests who arrive on them.

VAT is a separate question with its own document chain. Who invoices whom, the hotel to the agency or the agency to the guest, decides which document carries which amount. That chain is set by the commercial relationship and confirmed with the accountant.

The practical failure is a lump agency payment sitting in the bank with no allocation. Allocate it at receipt: which reservations, which arrival dates, which room nights, which rate. Agency terms also decide what happens to the money if the block is not picked up. Agree that in writing before the season, because the fiscal treatment follows the commercial terms, not the other way round. For the commercial side of early operator payments, see what an early tour operator payment buys.

What to do next#

Take four dates for one real reservation to your accountant: the collection date, the invoice date, the service date and any cancellation date. Agree one written rule for each of the four cases before the season starts. The rest of this article follows from that single idea: VAT can be moved by an invoice, accommodation tax cannot, and the final invoice has to show both without counting the same money twice.