In Turkey, invoices are vital documents used in a company's operations, ensuring your rights against any future violations or disputes with suppliers.

In this article prepared by the Trustus team, we will explain the concept of commercial invoices, their importance in Turkey, and shed light on the role of legal accountants in monitoring sales and purchase invoices and commercial receivables.

Commercial invoices in Turkey

A commercial invoice is a document issued by the supplier to specify the quality, quantity, and amount due from the customer or importer for the goods sold or services rendered, along with the agreed-upon commercial terms between the parties.

The commercial invoice is considered a fundamental document in the customs clearance process, issued based on the initial invoice, and it is used to calculate the applicable taxes on the goods.

Issuing invoices through the state system in Turkey

As invoices are official documents, they cannot be printed without approval from the Turkish Ministry of Treasury and Finance. However, at the beginning of 2021, the Tax Department and the Ministry of Treasury adopted the E-Arşiv system for invoice issuance, and since then, the use of paper invoices has been discontinued.

Therefore, when establishing your company, you will be assigned a username and password in the E-Arşiv system. Through this system, you can create the design of your electronic invoices, which will be used in your business transactions and must be in the Turkish language.

What is the importance of having a preliminary invoice before the commercial invoice?

It is important to have a preliminary invoice, also known as a "purchase invoice," before the commercial invoice, which is the "sales invoice." This is because you cannot sell a product or item that you do not initially possess.

Therefore, you must first prove the purchase of the product through an official invoice, and only then can you proceed with selling it.

However, profit tax and value-added tax in purchase invoices are deducted from sales invoices to avoid double taxation.

Proforma Invoice “Purchases”

Purchase invoices differ from sales invoices in that purchase invoices are issued before receiving the product and serve as proof in the state's system that you have acquired it, allowing you the right to sell it to your company.

These invoices are entered into your purchase ledger with the tax authority before you sell them, including the total cost of goods.

Commercial Invoice "Sales"

As for the commercial invoice, it is a final document issued by the seller after receiving the purchase invoice and then selling these products to the next buyer or the end consumer.

A purchase invoice can be transformed into a commercial "sales" invoice after the buyer agrees to the sales terms outlined in its terms and conditions.

The importance of issuing commercial invoices in Turkey

If you are a business owner in Turkey, it is essential to officially register your purchase and sales invoices in the tax authority's system, as you are a taxpayer in the country. This ensures the accurate calculation of taxes, both those you owe and those owed to you.

Issuing official purchase and sales invoices also contributes to improving your image with the tax authorities and positions you as a reputable company in Turkey. Some of the key advantages of registering your invoices with the tax authority include:

• Facilitating trade transactions.
• Documenting and confirming the completion of commercial transactions.
• Clarifying all specifications related to the commercial transaction between contracting parties.
• Recording financial data, payment methods, and agreed-upon amounts between the parties.
• Protecting the rights of the importer against any future violations or disputes with the supplier.
• Assisting the buyer in accurately determining total costs, revenues, and expenses.
• Preventing tax evasion and the resulting economic damage from unregistered sales that do not contribute to the state treasury.
• Specifying the taxes that the seller is required to pay to official authorities in the country.
• Building trust between companies and customers by allowing for the transparent tracking of all financial data for each transaction.
• Streamlining shipping and delivery processes, as commercial invoices contain all shipment details, including addresses, sender, receiver, and available delivery methods.
• Companies can easily obtain credit or bank financing through commercial invoices.

The role of the chartered accountant in following up on invoices

To ensure the alignment of your purchase and sales invoices with the specifications set by the tax authority, it is important to deliver these invoices to your legal accountant monthly. This process serves several purposes:

1. Your accountant will handle the task of submitting the purchase and sales invoices to the tax authority's system.
2. They will verify that the invoices correctly matched with the tax authority's system.

By following this procedure, you can achieve several benefits:

1. Ensure the legality of your business operations.
2. Prevent tax evasion.
3. Avoid double taxation.
4. Avoid fines and additional profit or VAT taxes.
5. Prevent discrepancies between your records and those of your buyers or sellers.

To illustrate this with an example:

When you purchase goods from a specific company (X) and sell them to another company (Y) using proper invoices, you should provide these invoices to your legal accountant for submission to the tax authority's records. If you fail to provide these invoices to your accountant, they will not be registered in your tax records. At the same time, companies X and Y will submit their invoices. This will alert the tax authority to potential tax evasion, and you may face fines or legal penalties.

In summary, submitting your invoices to a legal accountant for proper documentation and submission to the tax authority is crucial for maintaining the legal and financial integrity of your business while avoiding tax-related issues.

In conclusion

Invoices are essential official documents in commercial transactions and the buying and selling processes. If you are in the process of establishing a company and initiating sales transactions, you will need to issue invoices. Therefore, it is important to familiarize yourself with everything related to issuing commercial invoices in Turkey.

If you need more information about the data that must be included in commercial invoices or preliminary invoices in Turkey, feel free to contact Trustus, our legal consultation team, to receive free legal advice.

If you wish to manage your sales and purchase invoices for your company, we invite you to reach out to us, and our team can handle all matters related to your commercial receivables on your behalf. Contact us now!

Edited by: Trustus Consulting©

Source: Mevzuat Bilgi Sistemi