Invoicing public bodies: VAT withholding and accommodation tax on a hotel bill

When a hotel invoices a public body that is a designated buyer under section I/C-2.1.3 of the VAT General Implementation Communiqué, partial VAT withholding can apply: the buyer declares and pays part of the VAT. The rate on the room charge follows the "other services" section, and the withholding duty applies only if the buyer is on the narrower list defined in that section. Catering and events are listed services and are withheld at 5/10. The accommodation tax is shown separately and sits outside the VAT base.

A university sends a purchase order for ten rooms, a meeting room and a dinner. The front office issues one invoice with one total, and the accountant asks which lines carry withholding. The answer depends on two things the invoice does not show: who the buyer is, and which service each line actually is. This article sets out both tests, the threshold rule and the accommodation tax line, so you can build a public-body invoice that reconciles on the first pass. For VAT withholding on a hotel invoice in Türkiye, the four tests always run in the same order: buyer, service, threshold, tax line.

Why a public body's hotel bill is different#

Because the buyer may be a designated buyer, part of the VAT on the bill is declared and paid by the buyer rather than the hotel, so the invoice has to be built for that from the first line.

Withholding is not an exemption and not a discount. The total VAT stays the same; only the taxpayer who declares it changes. The buyer declares and pays the withheld share on its 2 No.lu VAT return, and the hotel declares the remaining share on its own return, under section I/C-2.1.3 of the VAT General Implementation Communiqué (opens in a new tab) (Revenue Administration, consolidated text to 16 June 2026).

Two questions decide everything: who is buying, and which service is being sold. The rate follows the service, and the duty follows the buyer, so both have to be answered before the invoice is issued. The communiqué sets its tests on those two answers, the buyer's category and the service, and the invoice is built from them. The buyer's own VAT registration does not matter either; the communiqué applies its list whether or not the buyer is a VAT taxpayer.

Getting it wrong cuts both ways. Withholding where the rule does not apply leaves the hotel chasing money it cannot easily collect, and failing to withhold where it does apply leaves the buyer's accounting and the hotel's return out of step.

Who counts as a designated buyer in the communiqué?#

Section I/C-2.1.3.1/b lists the designated buyers by category, and the list is closed: a buyer outside it does not withhold, whatever its public character.

The categories include administrations in the schedules attached to Law No. 5018, public bodies set up by law or presidential decree, revolving-fund bodies, public professional organisations, pension and aid funds, banks, insurance, reinsurance and pension companies, trade unions and their confederations, foundation universities, mobile electronic communications operators, water and sewerage administrations, state economic enterprises, entities under privatisation, Türkiye Wealth Fund entities, organised industrial zones and exchanges, bodies more than half owned by the above, companies listed on Borsa İstanbul, and development and investment agencies. Two entries are explicitly outside: school-parent associations and family medicine units. There is no withholding on sales between designated buyers, with professional sports clubs excepted.

Designation is only the first test. A second, narrower list governs services the communiqué does not name, and several designated buyers are not on that second list. A buyer can be public without being designated, and designated without being on the second list; both checks are needed for anything that is not a named service. Ask the buyer for its category in writing before the invoice is issued and keep the answer with the invoice file; the front office cannot settle this at check-in.

Wording of section I/C-2.1.3 (consolidated to 16 June 2026). The third column follows the literal list, so where your buyer falls outside it, confirm with your accountant before issuing.

Which hotel services do the withholding sections reach, as worded?#

The communiqué names catering and organisation, repair and maintenance, cleaning, transport and advertising at fixed rates, and reaches everything else through the "other services" rule at 5/10 for a narrower group of buyers.

Accommodation is not in the catering list. Meals at a hotel fall under catering only when they are given apart from accommodation, or are shown or invoiced separately from it. For the room charge itself, the strongest published guidance is the İzmir Tax Office Directorate ruling of 30 December 2021 (opens in a new tab) (Revenue Administration, özelge No. E-21152195-130[9-2021/3532]-542079): a public professional organisation withholds 5/10 of the VAT on hotel accommodation it buys, under the "other services" section, calculated on the total service price. A private ruling binds the taxpayer it was issued to. It is strong evidence of how the administration reads the section, not a law that settles every hotel's case.

The hotel is a buyer too. Laundry, cleaning and garden services it purchases are withheld at 9/10 by the hotel itself, because those services are withheld by every VAT taxpayer, not only by designated buyers. The rates are shares of the VAT, not of the price: 5/10 means half of the VAT on that line, and the hotel declares the other half. Nothing in the section turns on the size of the hotel, the length of the stay or the purpose of the trip. The general VAT treatment of rooms, meals and packages is covered separately in VAT on hotel stays in Türkiye.

Section I/C-2.1.3 of the VAT General Implementation Communiqué, consolidated to 16 June 2026.

Rooms, meetings and meals on one invoice#

Build the invoice service by service, because the rate follows the service and a bundled line cannot show which rate was applied.

Give each service its own line: accommodation, meeting room and technical equipment, coffee breaks, lunch, dinner, and the accommodation tax on a line of its own. If the meal sits inside the room price, as in bed and breakfast, half board or all-inclusive, it is not given apart from accommodation and not shown separately, so the catering rate does not attach to it; the package follows the accommodation treatment. If the hotel shows the meal separately, the catering rate applies to that line, and the choice must be visible on the document and consistent from invoice to invoice.

The withheld amount is calculated line by line on the VAT of that line, then totalled; the invoice shows the rate and the amount withheld next to the line. For example, a university books ten rooms, a meeting room and a dinner: the invoice carries three service lines plus the accommodation tax line, and the withholding is computed on the VAT of each service line. Send the same split with the proforma or the purchase-order confirmation, so the buyer's accounting and the hotel's return reconcile on the first pass. Event-heavy bookings raise the same questions at larger scale, as covered in MICE explained for hotels.

What happens to the accommodation tax line?#

It stays outside the VAT base, it is shown separately, and it is not part of the withholding calculation, because the withholding sections are VAT rules.

Article 34 of the Expenditure Taxes Law (opens in a new tab) (Law No. 6802, consolidated text) requires the accommodation tax to be shown separately on the invoices and similar documents the facility issues, forbids any discount of any kind from it, and keeps it out of the VAT base. The accommodation tax base is the consideration excluding VAT, so the two lines are computed from different bases and must never be merged into one figure.

Withholding is a mechanism for VAT: the buyer withholds a share of the VAT. The texts read here set no equivalent for the accommodation tax, so the facility declares and pays it. The amount the public buyer settles is the service total, plus VAT, minus the withheld VAT, plus the accommodation tax, and each part should be readable on the document. An invoice that shows only a grand total leaves the buyer's accounting unable to reconcile and can read as a discount on the tax, which Article 34 prohibits. Where a case is disputed, ask the accountant before issuing and, if the amount is material, ask the Revenue Administration for a ruling of your own. The day-to-day handling of the tax line is covered in Accommodation tax on hotel invoices.

When does the threshold apply, and what goes on the document?#

No VAT is withheld when the VAT-inclusive amount of the transaction does not exceed the Article 232 invoice limit for the year, which is 12,000 TL for 2026; above it, VAT on the whole amount is withheld.

The test is the VAT-inclusive amount of the transaction, not the VAT and not the net. Above the limit, the withholding applies to the whole amount, not only to the part above the limit. The price may not be split across invoices to stay under the limit; a series of invoices for one transaction is exactly what the section is written to stop. The wording changed in the Resmî Gazete of 10 February 2024 and took effect on 1 March 2024, so older secondary sources describe a different test; read the current text. The limit is reset each year by a Tax Procedure Law general communiqué; the 2026 figure of 12,000 TL comes from No. 588.

The document needs the buyer's name and tax number, one line per service with its rate, the VAT, the withholding rate and amount, the net payable, and the accommodation tax as a separate line. Keep the purchase order and the buyer's written confirmation of its category with the invoice, so the file answers the question a year later.

A proforma checklist before you issue#

Run these checks before the invoice leaves the building, because a corrected invoice costs more than a checked one.

Use the checklist on the proforma, not on the final document, so the split is agreed with the buyer before anything is issued. It applies to a single booking and to a group file alike; a congress with forty rooms and three meeting rooms runs the same checks. Anything the checklist cannot settle goes to the accountant before issuing, in writing, with the buyer's answer attached. The file that survives an inspection is the one that holds the purchase order, the buyer's category, the service split and the invoice together.

What to do next#

Before the next public-body booking, ask the buyer in writing which category it falls under and file that answer with the purchase order, then build the invoice service by service. The four tests run in order: the buyer, the service, the threshold, and the accommodation tax line that never enters the VAT base. Where the communiqué's wording does not settle your case, the accountant decides before the invoice is issued, not after.