The KDV Tax: is a tax imposed at different rates of expenditure, in accordance with the Value-Added Tax Or KDV Law No. 3065 of 1984, although the companies are the ones that pay this tax in accordance with the sales profits they achieve, but this tax is deducted from the final goods’ consumers this Means that this tax is ultimately deducted from the individual who consumes the goods. This tax is applied in almost all countries of the world and is imposed in Turkey according to the necessity of the goods consumed by %3, %8 and %18.

Computation of the KDV Tax

The KDV tax is calculated by deducting the tax rates from the selling price of the product. Therefore, the tax is increased according to the high prices of the products’ sales from the producer until it reaches the consumer.

Listed and calculated KDV Tax

The simplest way to calculate the KDV tax is to multiply (the price of the product x 1 + the tax rate) For example, assuming a product price of 1000 lira and the tax rate is %18, the calculation is as follows: 1000x (1 + 0.18) = 1000x 1.18 = 1180 lira the price of the Product after listing the tax (after deduction of tax).

For calculating KDV Tax not listed, it is enough to replace the multiplication process with division by dividing the price of the product by (1 + tax rate) e.g. by imposing the price of the product after deducting the tax of 1180 lira and the tax rate is %18, the calculation is as follows: 1180 / (1 + 0.18) = 1180 / 1.18 = 1000 lira the Product price before listing the tax (before deduction of tax).

Differences in Rounding Numbers in the KDV Tax Calculation

In the calculations, the first two places are used that follows the comma in the decimal numbers, and the reason for this is that the third in decimal numbers do not have a class or unit parallel to the Turkish currency, and rounding the third number that follows the comma as follows:

  • If the number mentioned is bigger than 5 it will be risen to the top such as 5,586 becomes 5,59.
  • If the number mentioned is smaller than 5, it will be dragged down as 5,583 becomes 5,58.
  • If the number 5 is close to the nearest number such as 5,585 becomes 5,58 because 8 is an even number. In this rule, zero is calculated as an even number. Rounding processes do not exceed the impact of calculations on one penny, which is a must to know the accounting.

KDV Tax Rate According to the Products

As mentioned above, there are three percentages of KDV tax imposed on products, namely %1, %8 and %18, which are divided by the following products:

  •  Products with %1 Deduction

Imposed on wheat and their derivatives that are considered basic consumables materials, as well as residential units that do not exceed an area of 150 square meters.

  • Products with %8 Deduction

Also, imposed on basic consumer materials which that do not fall within the luxury goods, such as meat and its derivatives, milk and derivatives, eggs, legumes, honey, jam, syrup, candy, some animals, and other products and services.

  • Products with %18 Deduction

Imposed on products that are not considered essential consumer goods with certain exceptions, such as: communications products, furniture, electrical appliances, some animals, some spices and other products and services.

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