Supplier Due Diligence Against Fake Invoice Risk in Turkey 2026: What the Tax Administration Checks (VAT Communiqué IV/A2-3), Bank Payment Rules (TPL Supplementary Art. 257), Delivery Notes and Invoices (TPL Art. 230), Optional Full VAT Withholding, Record Retention, Red Flags, Acquisitions and a Model Tax Compliance Clause

Against fake invoice risk in Turkey, the strongest defence is the record created at the time of the purchase. When the tax administration assesses whether a purchase rests on a fake or misleading document, it looks at whether the seller is active at its address, its capacity, its warehouse, vehicles and staff, how payment was made, how the goods were transported, and whether the purchase fits the buyer’s stock and payment capacity (VAT General Implementation Communiqué, sections IV/A2-3.3 and 3.4). Supplier due diligence means recording those points when the purchase is made. In taxation, the real nature of a transaction is decisive (Tax Procedure Law (TPL) Art. 3/B). VAT is deductible if it is shown separately on the invoice and recorded in the statutory books (VAT Law Art. 34(1)). The threefold tax loss penalty and the prison term in TPL Art. 359 depend on knowledge that the document was fake. Collections and payments above TRY 30,000 must be made through a bank, a similar financial institution or the post office (TPL supplementary Art. 257; Communiqués No. 459 and 575). For the transaction types subject to partial VAT withholding, a buyer may agree in writing with a seller to declare and pay the whole VAT itself; it is then not held jointly liable for VAT lost at earlier stages, up to the amount withheld (Communiqué sections I/C-2.1.2.5 and I/C-2.1.6.2). This guide sets out the checklist with its legal basis, the retention periods, what to do when negative information emerges, points for foreign-owned groups and acquisitions, and a model tax compliance clause. It reflects the law in force on 27 October 2026.

Short answer: the supplier checklist

The checklist below combines the points the tax administration examines when it assesses fake documents with the buyer’s own obligations. The last column shows the provision or administrative rule each check relates to.

These checks show the company’s good faith and prudence in any later examination. Dated records showing that a check was made on the transaction date are stronger evidence than documents assembled afterwards. The criteria the administration uses to assess intent are explained in our main guide on fake invoice allegations and KURGAN tax audits in Turkey.

Legal framework: why check at all?

Supplier checks matter because, in a fake invoice file, both the tax and the criminal consequences depend on what the buyer knew and how careful it was. Under TCC Art. 18(2), a merchant must act as a prudent businessperson in all activities relating to its business. That standard also sets the level of care expected of a buyer.

The purpose of the checks is not to audit the seller in place of the tax administration. It is to document that, on the transaction date, the buyer showed the care expected of a reasonable merchant. A buyer cannot always know whether a seller is meeting its own tax obligations. When a fake document allegation is made against a buyer acting in good faith, the reality of the transaction and the buyer’s care are therefore assessed together.

Check what the administration checks (Communiqué IV/A2-3)

The VAT General Implementation Communiqué sets out in detail what is examined during the visit to the premises of a taxpayer about whom a finding of issuing fake documents has been made, and what must be established in reports on the use of fake documents. Those points can be used directly to define the content of supplier checks: the information the administration will look for later should be recorded by the buyer on the purchase date.

Under section IV/A2-3.3, a taxpayer referred for examination because of the risk of issuing fake documents is visited at its known business address by a group of at least two officials within five working days. The visit must establish whether the taxpayer is active at that address, whether it has commercial activity both in the current period and in the period concerned, its production or trading capacity, its warehouses, facilities, vehicles, machinery, equipment and fixtures, its stock and its number of employees. Statements of nearby traders, the site manager, neighbours or the local headman about the taxpayer’s activity and reputation are recorded separately where available.

For reports on the use of fake documents, section IV/A2-3.4 requires the report to state whether there was a real supply between the buyer and the issuer, whether any payment was made, how it was made (bank, cheque, bill, cash, post office, credit card) and how the goods were transported. Whether the buyer actually received the goods or services must be supported by further work such as stock accounting, yield analysis and cross-examination of counterparties. The report must also assess whether the goods or services on the invoices fit the nature of the buyer’s business, its stock position, and its capital and payment capacity, and must evaluate the buyer’s tax payment record.

In its chapter on special refund rules, the Communiqué also states that the parties to a transaction, refund claimants or taxpayers may claim and prove, under the freedom of evidence in TPL Art. 3, that a document about which the administration has findings of falsity or misleading content rests on a real transaction and reflects it correctly in nature and amount. Counter-evidence is submitted to the inspector if an examination has begun, and otherwise to a three-person commission at the tax office; if it shows that the transaction was real, no action is taken under the negative finding. The content of that evidence is the file created on the purchase date.

Payment: through a bank, to the seller, with no return

Under TPL supplementary Art. 257(2), the Ministry of Treasury and Finance may require taxpayers and others to document their collections and payments with documents issued by banks, similar financial institutions or the post office. Communiqué No. 459 on the Tax Procedure Law sets the threshold in its section 4.1 (“Scope and amount”). Communiqué No. 575, published in the Official Gazette on 30 November 2024, raised that amount from TRY 7,000 to TRY 30,000.

A cash payment from the till, even below the threshold, makes it harder to prove the reality of the transaction. A payment through a bank into the seller’s own account is among the most concrete evidence of the buyer’s good faith. The threshold can change, so the amount in force on the payment date should be checked.

Flow of goods: delivery notes and invoice contents

Where goods are carried or sent to the buyer by the seller, the seller must issue a delivery note and keep it in the vehicle; where the buyer carries or sends for the goods, the buyer must do so (TPL Art. 230(5)). An invoice must contain at least its date, serial and sequence number; the issuer’s name, trade name, business address, tax office and account number; the customer’s details; the type, quantity, price and amount of the goods or work; and, for goods sold, the delivery date and the delivery note number (TPL Art. 230).

The delivery note number on the invoice and the delivery note itself, the vehicle on the delivery note and the transport document, and the quantity carried and the stock entry are the points compared during an examination. Any mismatch should be noticed and corrected on the purchase date.

Optional full VAT withholding

Under section I/C-2.1.2.5 of the VAT General Implementation Communiqué, taxpayers who conclude a written one-year agreement with a seller may, for purchases of the transaction types subject to partial withholding, declare and pay the whole of the VAT as the responsible party, whether or not they would otherwise have to withhold. The VAT is then not paid to the seller; the buyer declares and pays it directly. For that transaction, the risk that the seller fails to declare the VAT is removed.

The transaction types subject to partial withholding include construction works, maintenance and repair of machinery and equipment, catering, labour supply, cleaning and transport services, and supplies of metal ingots, copper, zinc, aluminium and lead products, scrap and waste, cotton, mohair, wool and leather, timber and forest products, and iron and steel products (Communiqué I/C-2.1.3.2 and I/C-2.1.3.3). In those sectors, optional full withholding is a strong tool alongside supplier checks.

The Communiqué also provides that those who withhold VAT on purchases subject to withholding are not held jointly liable for VAT arising at earlier stages that did not reach the Treasury, provided they have declared and paid the withheld amount, and only up to the amount withheld (section I/C-2.1.6.2). Because full withholding means the buyer pays the seller only the price excluding VAT, cash flow and the contract price must be arranged accordingly.

If negative information about a seller emerges

After a purchase, the company may learn that a report or finding of issuing fake documents exists about the seller. The information may come during the review of a VAT refund claim, through a letter sent under the KURGAN system or during a tax examination. The route to take at that point depends on whether the company is confident that the transaction was real.

An amended return can be read as a statement that the transaction was not real. Filing one for a genuine purchase can therefore harm the company in both the tax and the criminal file. The decision should follow the criteria in our guide on amended return or defence after a KURGAN letter. The options in the refund procedure are explained in our Turkish guide on VAT refunds suspended because of fake documents (in Turkish).

Retention periods and the criminal file

The value of the supplier file depends on whether it can be produced when an examination takes place. Those required to keep books must retain their books and documents for five years from the beginning of the calendar year following the year to which they relate (TPL Art. 253). Books, documents and electronic records that must be retained, together with the information and passwords needed to access them, must be produced on request of the competent authorities during the retention period (TPL Art. 256). The Turkish Commercial Code sets a ten-year retention period for commercial books, accounting documents and certain other papers (TCC Art. 82).

Because the prosecution limitation period in the criminal file can be longer than the retention period in the tax laws, the supplier file should be kept for the longest of these periods.

Red flags that call for further checks

Some situations show that a transaction departs from the ordinary course of business. Under TPL Art. 3/B, a party that alleges a situation that does not fit economic, commercial and technical requirements, or that is not normal and usual for the nature of the event, must prove it. Because unusual features can later be used against the buyer, the check should be deepened in these situations and its result recorded.

The presence of a red flag does not show that a transaction is fake. What matters is that the buyer, once it notices the situation, makes a further check and documents the result. An unusual feature that was noticed but never explained can be used against the buyer in the assessment of intent.

How to keep the supplier file

A separate file should be kept for each supplier and updated with each purchase. The Ministry may permit books and documents to be kept electronically and set the procedure (TPL supplementary Art. 257(3)); records that must be retained, and the information needed to access them, must be produced on request (TPL Art. 256).

The value of the file comes from the documents having been created on the transaction date. Documents assembled afterwards can be questioned in an examination, so dated query printouts and the creation dates of electronic records should be preserved.

Internal risk: employees, agents and managers

A fake invoice does not always come from the seller. An employee, a purchasing agent or a manager may obtain fake invoices without the company’s knowledge. The company’s good faith is then assessed together with its internal controls. Written purchasing authorities, payment approval given to a person other than the one who purchases, and comparison of deliveries with warehouse records are the basic elements of such controls.

Claims between the company and its managers are discussed in our guide on personal liability of directors and managers in fake invoice cases, and the company’s liability for the acts of its managers and employees more generally in our guide on company liability for managers and employees in Turkey.

Points for foreign-owned groups and acquisitions

An international group may already have a global supplier onboarding procedure. In Turkey, that procedure should be mapped onto the points the tax administration actually examines: the seller’s tax registration and activity at its address, its capacity, bank payment to the seller’s own account, delivery notes and transport documents, and stock records. A global questionnaire that does not capture those points leaves a gap in the evidence a Turkish subsidiary will need.

The same points matter when a foreign investor buys a Turkish company. The target’s tax position stays with the company after the purchase. Tax may be assessed within five years from the start of the year following the year in which the tax arose (TPL Art. 114(1)), and the prosecution limitation period for the fake document offence is longer. In a limited company, partners are directly liable, in proportion to their capital shares, for public receivables that cannot be collected from the company; where a share is transferred, the transferor and the transferee are jointly liable for public receivables relating to the period before the transfer (Law No. 6183 Art. 35). Tax and penalties that cannot be collected from a company may also be collected from legal representatives who did not perform its tax duties (TPL Art. 10).

Findings should feed into the purchase price, specific indemnities and the disclosure schedule. The wider approval and due diligence framework is described in our guide on buying a Turkish company as a foreign investor.

Model tax compliance clause

The clause below is drafted for insertion into a buyer’s framework supply or services contract. It turns the seller’s document and filing obligations into contractual obligations and makes it easier for the buyer to claim its loss under Code of Obligations Art. 112 if they are breached. It is an English working draft for group review; the contract should be adapted to the company’s sector and the nature of the transactions, and the Turkish text should be checked before signing.

The clause does not change the seller’s obligations to the tax administration. It governs responsibility and the flow of information between the parties only. Where an English-language group contract is used, the Turkish version and the governing law clause should be reviewed together, so that the clause can be relied on before a Turkish court if a claim against the seller becomes necessary.

How Hukukçular Evi can help

Supplier due diligence is legal work done before a fake invoice file exists. Hukukçular Evi Ankara designs supplier check procedures for the company’s sector, defines the content of the supplier file, drafts tax compliance and recourse clauses for supply contracts, assesses optional full VAT withholding, sets out the route to take when negative information about a seller emerges, reviews fake invoice exposure in target due diligence, and prepares the company’s defence if a KURGAN letter or examination arrives. We work in English with foreign-owned companies and group procurement, tax and legal teams. The scope of the service is described on our fake invoice defence page (in Turkish), and the lawyer’s profile is on the author page. You can reach us on +90 554 648 37 15.

Frequently asked questions

Is supplier due diligence a legal requirement in Turkey?

The law does not list a separate duty to check suppliers. A merchant must, however, act prudently in its business (TCC Art. 18(2)), and checks are evidence of the reality of the transaction and of good faith if a fake document allegation is made (TPL Art. 3/B).

What does the tax administration examine at the seller?

Whether it is active at its known address, its capacity, warehouses, vehicles, machinery and staff, its stock, and whether it has commercial activity in the relevant periods (VAT General Implementation Communiqué IV/A2-3.3).

What does a report on the buyer look at?

Whether there was a real supply, whether and how payment was made, how the goods were transported, stock accounting and yield, and whether the purchase fits the buyer’s stock, capital and payment capacity (Communiqué IV/A2-3.4).

From what amount must payment be made through a bank?

Collections and payments above TRY 30,000. The amount was raised from TRY 7,000 by Communiqué No. 575 (TPL supplementary Art. 257; Communiqué No. 459, section 4.1). The amount in force on the payment date should be checked.

Is paying through a bank enough on its own?

No. It should also be shown that payment went to the seller’s own account and that the money did not come back. Payment is assessed together with delivery and transport documents.

Who issues the delivery note?

The seller if it carries or sends the goods, and the buyer if it carries or sends for them; the note must be kept in the vehicle (TPL Art. 230(5)).

What is optional full VAT withholding?

An arrangement under which the buyer, by a one-year written agreement with the seller, declares and pays the whole VAT itself for transaction types subject to partial withholding (Communiqué I/C-2.1.2.5).

Can full withholding be used for any purchase?

No. It is limited to transaction types subject to partial withholding; survey, project, consultancy, audit and similar services and the “other services” and “other supplies” categories are excluded.

How does full withholding protect the buyer?

Because the VAT is not paid to the seller, the risk of the seller failing to declare it is removed, and the buyer is not held jointly liable for VAT lost at earlier stages, up to the amount withheld (Communiqué I/C-2.1.6.2).

What should we do if we learn that a report exists about our seller?

If the transaction was real, submit written counter-evidence; the Communiqué allows the parties to prove under TPL Art. 3 that a document rests on a real transaction. If the reality of the transaction is doubtful, assess an amended return and voluntary disclosure with their consequences.

Should we file an amended return for a genuine purchase?

An amended return can be read as a statement that the transaction was not real, so its legal consequences should be assessed first (TPL Arts. 371, 378(2)).

How long should supplier documents be kept?

Five years from the following year under the tax laws and ten years for commercial books and accounting documents (TPL Art. 253; TCC Art. 82). The prosecution limitation period for the fake document offence is fifteen years, so the longest period should guide retention.

What should a supply contract contain?

Invoice and filing obligations, delivery of documents, payment only to the seller’s account, notification of negative findings, cooperation in examinations, indemnity and termination clauses.

What penalty applies if we bought without knowing the seller issued fake invoices?

Without intent, the prison term in TPL Art. 359 does not apply, and the tax loss penalty is one times rather than three times the tax (TPL Arts. 344, 359; Criminal Code Art. 21).

Can the administration still deny the deduction if we made the checks?

It can. The checks and documents are, however, the basis of the defence in the tax court and in any criminal file, because they prove the reality of the transaction and the company’s good faith (TPL Art. 3/B).

Related guides

• Fake Invoice Allegations and KURGAN Tax Audits in Turkey — the entry point to this series
• Amended Return or Defence after a KURGAN Letter in Turkey
• VAT Deduction Denied for Fake Invoices in Turkey: How the Assessment Is Calculated
• Personal Liability of Directors and Managers in Turkish Fake Invoice Cases
• Called to Give a Statement in a Turkish Fake Invoice Investigation
• Buying a Turkish Company as a Foreign Investor
• Company Liability for Managers and Employees in Turkey
• Legal Guide for Foreign Investors in Turkey (Türkiye) 2026
• Knowing or Unknowing Use of Fake Documents: Intent Criteria (in Turkish)
• Replying to KURGAN and Examination Preparation Letters (in Turkish)
• VAT Refund Suspended Because of Fake Documents (in Turkish)
• Limitation Periods in Turkish Fake Invoice Cases
• Fake Invoice and KURGAN Decision Tool (in Turkish)
• Effective Repentance in Turkish Fake Invoice Cases
• Challenging a Fake Invoice Assessment in the Turkish Tax Court
• Travel Bans in Turkish Fake Invoice Investigations
• Precautionary Attachment in Turkish Fake Invoice Cases