VAT on booking site commission invoices: the reverse-charge return for hotels
Discover why booking site commission invoices lack VAT lines and how to handle them under Turkish law. This guide explains reverse charge mechanics, applicable rates, and deduction timing for hotels.
Contents
Key takeaways
- Under Turkish VAT law, the recipient of a service from a non-resident generally declares and pays the whole VAT as the responsible party, whether or not it is a VAT payer. Confirm the exact basis and your own case with your accountant or legal adviser.
- Commission paid to a foreign booking platform is generally taxed at the general VAT rate, not the reduced rate for certified travel agencies. The general VAT rate in Türkiye is currently 20%. Confirm the rate in force for the specific period of the service with your accountant.
- The timing of when the VAT declared this way can be deducted depends on the current rules. Confirm the applicable period and method with your accountant.
- The rule turns on where the service is used: a hotel buying online reservation services from firms abroad is generally treated as using the service in Türkiye. Confirm your own case with your accountant or legal adviser.
- No VAT is generally declared this way if the service is exempt, or if it is both performed and used abroad. Confirm the exemption and its conditions with your accountant.
A hotel that pays commission to a foreign booking platform holds an invoice with no Turkish VAT on it. Under Turkish VAT law, services bought from non-residents are generally subject to reverse charge: the hotel becomes the party responsible for the tax, declares it itself, pays it, and deducts it later. Confirm the specific legal basis, the rate in force for the period of the service, and your own case with your accountant or legal adviser.
The commission invoice arrives from the booking platform, in euros, with a commission line and no VAT line. The hotel books it as an expense and moves on, and the VAT that should have been declared on Return No. 2 is never declared at all. After reading this article you will know why the VAT line is missing, who is responsible for it, which rate applies, when the deduction becomes available, and what to keep in the file so the whole chain can be shown later.
What is missing from the commission invoice that arrives each month?
The invoice carries the commission and no Turkish VAT, and that absence is not an error by the platform: the VAT on that service is declared by the hotel, not by the seller. The document is issued abroad by a company with no residence, workplace, legal seat or business centre in Türkiye, which is exactly the condition Article 9(1) of VAT Law No. 3065 is built around.
The commission pays for an intermediary service. The platform brings a reservation, and the hotel buys that service. It is not a room sale and it is not a discount on the room. Because the seller sits outside the Turkish VAT system, the invoice has no VAT line the hotel can deduct, and booking it as a plain expense and stopping there leaves the declaration undone.
The commission is still a real cost, and the full amount, with no VAT added on top, is the expense figure that goes into the profit and loss account. The invoice is only half of the record. The other half is the Return No. 2 you file and the receipt showing you paid the tax it declares. This cost sits inside your wider distribution cost per booking, so it is worth reading the document before you book it.
ChecklistBefore booking a commission invoice, check
- Issuer name and country
- The service described, which should read as an intermediary or reservation service, not a room sale
- The period the commission covers
- Currency and amount
- Whether any VAT or tax line appears
- The document date, which drives the period the VAT belongs to
Reverse charge in plain words: what does Article 9 actually say?
Article 9(1) of VAT Law No. 3065 lets the Ministry of Treasury and Finance hold the buyer responsible for the VAT when the seller has no residence, workplace, legal seat or business centre in Türkiye. The buyer declares and pays that VAT itself, and that mechanism is what reverse charge means. Section I/C-2.1.2.1.1 of the VAT General Implementation Communiqué (opens in a new tab) (Mevzuat Bilgi Sistemi, current text) sets the scope: services a non-resident performs in Türkiye, or performs abroad but which are used in Türkiye, are subject to VAT, and the whole VAT is declared and paid by the recipient in Türkiye as responsible party on Return No. 2 (2 No.lu KDV Beyannamesi).
The recipient does not have to be a VAT payer. A business outside the VAT system also declares and pays on Return No. 2. There are two exclusions: no VAT is declared if the service is exempt, or if it is both performed and used abroad.
A GİB ruling of 30 April 2025 (Çanakkale Defterdarlığı) applied this to a hotel buying online reservation services from Dutch and Swiss firms: the service is used in Türkiye, so the hotel declares the VAT on Return No. 2. The test is where the service is used, not where the invoice is printed and not where the payment leaves from.
Key pointReverse charge (sorumlu sıfatıyla KDV)
Reverse charge means the buyer, not the seller, declares and pays the VAT on a service bought from a seller outside the Turkish VAT system. The buyer is not paying someone else's tax as a penalty. It is remitting the VAT on its own purchase, and it can generally deduct that VAT later.
Which VAT rate applies to booking commission?
The general VAT rate, which has been 20% since 10 July 2023 under Presidential Decision No. 7346. The commission does not follow the rate on the room. A GİB ruling of 13 May 2016 (opens in a new tab) (İstanbul Tax Office Directorate, No. 39044742-130-57235) held that commission a hotel pays to a foreign web portal for online reservations, declared on Return No. 2, does not fall under item B/25 of list (II) of Decision 2007/13033. That item's reduced rate covers intermediary fees only of travel agencies holding a Ministry of Culture and Tourism certificate under Law No. 1618, and a foreign platform is not such an agency.
The ruling applied 18% because 18% was the general rate in 2016. The general rate has been 20% since 10 July 2023, so the rate to use is the one in force for the period of the service. Undated accounting pages that still print 18% are quoting the rate of their own period. Check the rate in force for the period you are declaring, every time.
The room sale and the commission are two separate taxable events with two separate taxpayers. The hotel invoices the guest, and the platform invoices the hotel. Do not carry the rate you use on your own room sales over to what you buy: the two rates answer different questions. The rate on the room itself is a separate topic, covered in VAT on hotel stays in Türkiye.
| Transaction | Who issues the invoice | Turkish VAT on the invoice | Who declares the VAT | Which return |
|---|---|---|---|---|
| The hotel's room sale to a guest | The hotel | Yes | The hotel | Return No. 1 |
| Commission from a foreign booking platform | The platform abroad | No | The hotel, as responsible party | Return No. 2 |
| Commission to a Ministry-certified travel agency (Law No. 1618) | The agency in Türkiye | Yes | The agency | Return No. 1 |
Item B/25 of list (II) of Decision 2007/13033 is the provision the 2016 ruling distinguished, and it concerns certified agencies, not foreign platforms.
Return No. 2: who files it, when, and how is the VAT recovered?
The hotel files Return No. 2 for the period in which it received and used the service, pays the VAT it shows, and since 1 January 2024 deducts that VAT on the Return No. 1 of the period in which it pays. Return No. 2 is a separate return from the monthly Return No. 1. It declares only the VAT the hotel owes as responsible party on purchases from non-residents.
Law No. 7491 added point (ç) to Article 29(1) of the VAT Law, in force from 1 January 2024, allowing deduction of VAT that a withholding party declared and paid as responsible party. Section III/C-1.1 of the Communiqué, added in the Resmî Gazete of 10 February 2024, sets the timing: from the January 2024 period, VAT declared on Return No. 2 is deducted on the Return No. 1 of the period in which it is paid.
There is one exception. VAT declared on time on a Return No. 2 filed before the same period's Return No. 1, and paid on time, may be deducted on the Return No. 1 of the period the Return No. 2 belongs to. Partly paid VAT is deductible only to the extent paid. Paying late does not lose the VAT, it moves the deduction to a later month.
In the Communiqué's own example, VAT on a July 2024 service, declared on time but paid on 28 August 2024, is deducted on the August 2024 Return No. 1. Deduction happens on Return No. 1, so a business outside the VAT system should confirm its own position with its accountant rather than assume the amount is recoverable.
Watch outThe timing trap
The month you declare and the month you deduct are not the same month. If the Return No. 2 is paid late, the deduction moves to the month of payment. Diarise the payment date, not only the filing date.
Foreign currency and the date on the document
The commission arrives in a foreign currency and Return No. 2 is filed in Turkish lira, so the amount must be converted. In practice the conversion is normally tied to the period the service falls in, not to the day the accountant gets to it; confirm the rule with your accountant. Fix the taxable event first: the period in which the service was performed and used. The document date, the service period and the payment date can all fall in different months.
Write down the rate you used and where it came from. Central-bank indicative rates are published daily, so the source is easy to evidence later. Which rate applies, buying or selling, and which day's rate, is a technical point in the VAT Law and the communiqué, so confirm it with your accountant instead of copying an undated page.
Use the same converted figure on Return No. 2, on the payment and on the Return No. 1 deduction. Three different lira figures for one invoice is a common way a reconciliation fails. Keep the invoice, the conversion note, the payment receipt and the filed return together, so the chain can be shown when someone asks. If one invoice covers several months or several properties, split it by period and by property before converting.
TipOne line per invoice
Attach a rate note to each foreign-currency invoice: currency, amount, rate, source of the rate, date of the rate, and the lira amount used on Return No. 2. It takes a minute and answers the question two years later.
The entries, with an invented amount
Three movements: book the commission and the responsible-party VAT when the invoice arrives, pay the platform and the tax, then move the VAT to deductible once it is paid. For example, take a commission invoice of EUR 1,000, converted at an assumed rate to TRY 40,000, with VAT at the general rate of 20%, so TRY 8,000. All amounts here are invented to show the structure.
The expense is the full TRY 40,000. The platform added no VAT, so nothing is hidden inside the commission figure. The TRY 8,000 is not a cost while it is recoverable: it sits in a payable account for the responsible-party VAT until payment, then moves to deductible VAT. If the hotel cannot deduct it, the TRY 8,000 becomes a cost, and that is an accountant decision, not a bookkeeping habit.
Do not net the commission against the platform's payouts without showing gross commission and VAT separately. Netting hides both figures and makes the return impossible to reconcile. Account names differ from one chart of accounts to another; the structure is what matters. If you want to see how these figures originate in the hotel's daily records, read what moves from the PMS to the accounting system at day end.
| Entry | Movements in plain words |
|---|---|
| 1. Invoice received | Debit commission expense 40,000; debit responsible-party VAT, recoverable, 8,000; credit payable to the platform 40,000; credit responsible-party VAT payable 8,000 |
| 2. Payment | Debit payable to the platform 40,000, credit bank 40,000; debit responsible-party VAT payable 8,000, credit bank 8,000 |
| 3. Deduction | Debit deductible VAT for Return No. 1, 8,000; credit responsible-party VAT, recoverable, 8,000 |
All amounts in the table are invented to show the structure.
Withholding tax and other foreign sites: what should you ask your accountant?
Reverse-charge VAT is only one of the questions a payment abroad raises. Withholding tax (stopaj) is a separate question, and this article does not answer it. Ask whether withholding applies to this payment at all, and on what characterisation of the platform's income. Ask whether a double taxation treaty changes the answer, and whether the platform's own position in Türkiye affects it. Ask whether GİB has published a ruling on this specific platform or this specific service.
Confirm the counterparty's status from the invoice and the contract, not from a blog post. Do not assume a platform is or is not registered in Türkiye without an official source. The same Article 9 logic reaches every non-resident service the hotel buys: channel managers, metasearch, foreign advertising, foreign software subscriptions. Build one list and review it once a year, and keep the contract, the invoices, the payment receipts, the returns and the rate notes in one file per counterparty.
ChecklistOne page of questions for the accountant
- Does withholding apply to this payment?
- Does a treaty change that answer?
- Has GİB ruled on this service?
- Is the counterparty resident or not, and which document shows it?
- Which other foreign services does the hotel buy, and are they all on Return No. 2?
- Where is the evidence file for each counterparty?
What to do next
Take last month's commission invoice, check whether any responsible-party VAT was declared for it, and put the invoice, the payment receipt and the exchange rate you used in front of your accountant before the next Return No. 2 period closes. The pieces fit together in one order: the foreign invoice creates the obligation, Return No. 2 declares and pays it, the payment date makes the deduction available on Return No. 1, and the evidence file proves the chain. Confirm dates, penalties and your own case with your accountant or legal adviser.
Frequently asked questions
Do I file Return No. 2 if I am not a VAT payer?
Yes. Section I/C-2.1.2.1.1 of the VAT General Implementation Communiqué says the recipient need not be a VAT payer, and businesses without VAT liability also declare and pay on Return No. 2. Deduction happens on Return No. 1, so confirm with your accountant what your own position allows.
Is the rate 18% or 20%?
The general rate has been 20% since 10 July 2023 under Presidential Decision No. 7346. The 2016 GİB ruling applied 18% because that was the general rate at the time. Use the rate in force for the period of the service, not the rate on an undated page.
Can I deduct the VAT I declared on Return No. 2?
Yes, since 1 January 2024. Law No. 7491 added point (ç) to Article 29(1), and Communiqué Section III/C-1.1 places the deduction on the Return No. 1 of the period in which the VAT is paid. There is a narrow exception for a Return No. 2 filed and paid on time before the same period's Return No. 1, and partly paid VAT is deductible only to the extent paid.
Does this apply to other foreign invoices, not just booking sites?
Yes. The rule covers any service a non-resident performs in Türkiye, or performs abroad but which is used in Türkiye. Exempt services, and services both performed and used abroad, stay outside it.
What if one commission invoice covers several months?
Split it by period before converting, declare each part on the Return No. 2 of its own period, and keep one rate note per period. One lira figure stretched across several returns is the usual cause of a mismatch between the return and the ledger.
Sources
- Katma Değer Vergisi Genel Uygulama Tebliği (güncel metin), Bölüm I/C-2.1.2.1.1 (opens in a new tab)Mevzuat Bilgi Sistemi (T.C. Cumhurbaşkanlığı)mevzuat.gov.tr
- Katma Değer Vergisi Genel Uygulama Tebliği (güncel metin), Bölüm III/C-1.1 (opens in a new tab)Mevzuat Bilgi Sistemi (T.C. Cumhurbaşkanlığı)mevzuat.gov.tr