VAT Refund Scam in Turkey

You’re out shopping anywhere in Turkey (particularly in a carpet shop). You find something you like. The price is suitable, or you haggle until it is suitable. You decide to buy. Good!

The salesperson says “I must charge you Value-Added Tax” (KDV in Turkish) “but you can obtain a tax refundat the airport when you take your purchase out of Turkey.”

Even better! Tax-free shopping! When it works, it’s great: at the airport you apply to a tax refund office in the terminal before you go through passport control. You show them your purchase receipt, fill in a form, and they pay you the tax refund.

But often it does not work, and here’s why. The salesperson may tell you that the tax is refundable at the airport, but on your purchase receipt it may say that you have already received the refund directly from the shop:

Uh-oh… The salesperson asked you to sign the receipt (“for your tax refund”). You signed the unfamiliar form without reading it carefully. When you get to the airport, request your refund and are refused, you examine the form more closely and see the notice saying that by signing the form you’ve confirmed that you’ve already received your refund.

Did you?

In theory, it’s a convenience: you get the benefit of the refund right then and there when you make your purchase, and the price you pay is the tax-free price. The problem arises when you are led to believe that the price you are paying is item-plus-tax, and that you will receive a refund at the airport, in effect lowering the amount you pay.

Confusing, certainly. You don’t expect such a thing. The salesperson knows you don’t. You signed without reading, so the fault is partly yours.

Caveat emptor! (“Let the buyer beware!”)

The promised tax refund that helped you decide to make the purchase has already been deducted from the price you’re paying.

Here’s how to avoid this disappointment:

1. Do not sign anything that you have not read completely in a language you understand.

2. Do not rely on verbal commitments. Get it in writing.

3. Make your purchase decision on the basis of the final tax-included price. If you receive a refund, good! If you don’t, no matter.

4. If someone asks you to sign a form confirming that you have received a tax refund, make sure you have received the refund before you sign.

5. If you suspect sleazy dealing from any salesperson, do not do business with them. There are plenty of honest merchants in Turkey. Go find a better one.

Here’s a different twist on the VAT tax refund scam….


More VAT Tax Refund Scams

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