A Widely-known Phenomenon
Briefly, “Transit Trade” is to buy a product from another country and bring it into your own country and sell it in another country without bringing it into the customs area.Goods subject to transit trade are not subject to taxes and duties. When we bring the goods we buy into our country, unload them in bonded warehouses and sell them to another country, we must issue a warehouse declaration.
In this type of trade, the company in the country where we buy the goods has to invoice us, and we have to invoice our customers in the country where we sell the goods.
The invoice to be issued to our customer must be in English and without VAT. In order to tax our revenue in our country, it is essential to issue the Turkish invoice without VAT. As we do not pay VAT when we buy and export when we sell, VAT is not included in these invoices.
Transit trade is a form of trade and is not subject to export and import regulations. Therefore, no customs declaration is issued in any way. This form of trade is subject to tax exemption.
All means of payment used in import and export can also be applied in transit trade. In other words, payment methods such as cash, letter of credit, LC payment, document equivalent can be used. All natural and legal persons resident in our country who are taxable and registered with the Chambers of Crafts can engage in transit trade and are called transit traders.
The payment made by the transit trader to the seller from whom he bought the goods is the purchase price and the price collected by the buyer is the selling price. These costs are to be settled by one of the payment methods in export and import, presentation of purchase and sales invoices and a written instruction by the bank.
Transit trade cannot be carried out with goods whose trade is prohibited by international agreements and with countries whose import and export is prohibited. In transit trade, goods purchased from another country are sold to other countries without nationalisation.
In this trade, which takes place when the goods are purchased by the seller and arrive at the buyer, it does not matter from which place the goods are shipped. Only the shipping documents have to be designed according to the regulations of the country the goods are entering and leaving.
This system, which is easier than export and import because of its legislation, still brings foreign currency into our country. Although it may seem simple, it actually requires too much attention.