What You Need to Know about Turkey’s Tax-Free Car Scheme for Foreigners
We’ve covered the topic of bringing in your own car from abroad to use in Turkey, but what if you want to buy a car here?
You can buy brand new cars from auto fairs, auto galleries, dealers, and car markets even if you are a foreign national.
If you’d like to go the cheaper and perhaps more sustainable route (unless you plan on buying a hybrid or fully electric car), you can also look for second-hand vehicles.
The best place to search for second-hand cars is online, on websites such as sahibinden.com or hurriyetoto.com, dealerships, or newspaper ads, but you may also come across for sale signs on people’s cars while walking around the neighborhood too. Arabam.com is also a good place to check and compare prices.
All transactions are carried out at notary publics, and you may need an official court translator if your Turkish grasp is not adequate.
The Second-Hand Car Market Is Lucrative
The only thing you should know is that second-hand cars do not lose their value as quickly as in Europe.
As soon as you step on the gas pedal in the U.K., for example, your car’s value drops. After 10 odd years of use, you could end up only getting a few hundred pounds for your vehicle if you decide to sell it, for which you had initially splashed out a few thousand. In Turkey, it’s quite the opposite. Although foreign currency exchange rates and the economic situation largely dictate this, you could sell your 10-year-old car for double or triple the price in the current market and financial climate. So that’s a plus!
Being a foreigner in Turkey comes with its perks and when it comes to vehicle purchases, you have some tax advantages.
There are 2 ways you can go about purchasing a car in Turkey: the traditional way, which we’ll cover first, and the tax-free way.
Before All Else…
You need to have a valid residence permit before you even attempt to purchase a car.
Depending on the car you intend to buy, you’ll have to pay different taxes. Cars are divided into different tax categories according to their engine cylinder capacities and ages, and these prices will include Special Consumption Tax (Özel Tüketim Vergisi - ÖTV) and Value Added Tax (Katma Değer Vergisi - KDV). These figures are also updated regularly in line with EU regulations on CO2 emissions.
If you’d like to know more about the tax rates for the model you have our eye on, head to https://ivd.gib.gov.tr
If you are buying a used car from a Turkish citizen or if you do not have a work permit, you’ll have to pay tax. And that brings us to the topic of tax-free cars.
Tax-Free Cars for Foreigners
You can benefit from tax exemption as a foreigner if you are purchasing a new car from an authorized dealer, a second-hand car from another foreigner, or importing your own car to Turkey.
This means that you won’t have to pay ÖTV or KDV.
Warning: You will still have to pay annual road tax (bandrol tax), regardless of nationality.
The caveats to this scheme are that you can only benefit from this scheme for one car per person. The only exception is diplomatic and NATO personnel who can buy a car for their spouses.
The tax exemption is also only valid during your residency.
Foreign-owned vehicles can be used by the owner, their spouses, and children. However, Turkish citizens are forbidden from driving or buying these cars.
What Are Blue Plates?
Tax-free vehicles are known as “blue plates” in Turkey and can be distinguished by their “ME / MZ” vehicle registration plate.
The registration of your vehicle falls under the “blue license” category, which means it is only valid for the duration of your residence or work permit period. If you do not renew its registration at the end of this period, you’ll be handed a fine according to the customs tax rate.
Bonus: Unlike cars with foreign license plates, when you buy a tax-free car with a blue plate, you won’t have to exit the country every 6 months.
To Make a Tax-Free Car Purchase, You Must Be One of the Following:
- Retired foreigner
- Foreigner with a Turkish work permit
- Foreign lecturer or a full-time student
- Foreign staff working for the UN, NATO, or EU
- Foreigners working for foreign media companies (residing in Turkey without resident status) or
- Foreign sports professionals contracted to a Turkish sports club or the national federation
The Following People Cannot Benefit from This Scheme:
- Dual nationals (one being Turkish citizenship)
- Foreigners married to Turks (unless they have a valid working permit)
- Students of language courses such as TÖMER
- Those under the age of 18
The Documents You’ll Need When Buying Tax-Free Vehicles:
- Your passport
- Residence/work permits
- Notary document
- All documents belonging to the vehicle
- Tax receipts
If you are buying a car from another foreigner, the purchase will take place at the consulate of the seller’s nationality.
Whether you are a foreigner or a Turkish national, you’ll be asked to provide the same set of documents and go through the same vehicle registration procedures. After completing the purchase at the notary, you’ll need to register your car.
The Documents You’ll Need to Register Your Vehicle:
- Notary sales transaction (noter satış senedi)
- Sales invoice (fatura)
- Highway compliance certificate (karayolu uygunluk belgesi)
- Special Consumption Tax receipt (ÖTV makbuzu)
- Compulsory traffic insurance (zorunlu trafik sigortası)
Both the buyer and the seller must have a registered address to complete the transaction. The car must be registered within a month from your date of purchase. The vehicle must also be registered with a local traffic registration office where the foreigner resides. You’ll also need to buy insurance as the previous owners will only be valid for 15 days after your purchase.
If you purchase your car from a dealer, they will likely deal with the registration on your behalf, which may require you to give power of attorney to a legal representative.
Speaking of cars, if you’d like to learn more about the latest rules and regulations about getting a driver’s license in Turkey as a foreigner, check this post out.