Special Consumption Tax (SCT) Scope & Application Principles

In recent years, the Special Consumption Tax (SCT) has become a key topic in Turkey, especially with new regulations affecting the prices of certain products. In this article, we will explore the basic structure of SCT and how it applies to goods in Turkey.

What is SCT?‍

The Special Consumption Tax (SCT) was introduced in Turkey in 2002 as a tax mainly applied to luxury products. Over time, it has expanded to include essential goods such as motor vehicles, fuel, alcohol, and tobacco. This tax is one of the factors contributing to price increases in Turkey’s economy, affecting everyday products like electronics, cosmetics, and white goods.

Who Pays SCT in Turkey?‍

In Turkey, SCT is paid by those who first import or sell the product, often referred to as the producer or importer. Although SCT is similar to VAT in some ways, the main difference is that SCT applies only to the delivery of goods, not services. The tax becomes due once the ownership of goods is transferred.

Products subject to SCT in Turkey include petroleum, motor vehicles, alcohol, tobacco, cosmetics, and durable goods like household appliances. Additionally, Turkey offers SCT exemptions for individuals with disabilities (90% disability rate or higher), particularly when purchasing a vehicle. However, if the vehicle is sold within five years, the SCT must be paid retroactively.

Differences Between SCT and VAT in Turkey‍

SCT in Turkey is a one-time tax, unlike VAT, which is recalculated at each transaction stage. For example, once SCT is paid during the initial sale of a product in Turkey, no further SCT is applied to the same product. VAT, on the other hand, is charged repeatedly throughout the supply chain.

SCT Tax Base and Valuation in Turkey‍

The tax base for SCT is calculated either based on the value or quantity of the product. High-value items such as motor vehicles and smartphones are taxed based on their market value, while lower-priced goods may be taxed per unit or quantity. For example, in Turkey, smartphones are taxed by value, while accessories like phone cases are taxed by quantity.

What Triggers the SCT in Turkey?‍

In Turkey, SCT is triggered when a product is delivered to the buyer or when the invoice is issued. This applies even if the product has not been physically delivered, such as when pre-invoices for white goods are issued. Once the sale or import is finalized, SCT becomes payable.

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