Discusses pricing formula and other fees, value-added tax (VAT), etc.
Last Published: 6/17/2019

Price has traditionally been the most important business consideration, especially in government tenders.  Existing public procurement law instructs buyers to procure the product/service with the lowest price and best quality, though there is often, per a July 2017 government decree, a 15% price advantage for products produced domestically.  In general, the lowest price wins in public procurement tenders.  However, from time to time, life-cycle analysis or best value procurement may be used.  Private sector buyers may emphasize quality and the best value, but price remains a negotiation issue.  In both public and private sales, creative financing, which reduces upfront cash outlays or extends the terms of payment, can be of great value to Turkish clients.

U.S. firms should consider the recent devaluation of the Turkish lira against the U.S. dollar when making price calculations for their products and services, especially when in competition with local suppliers.

While imports from European Union and European Free Trade Association (EFTA) countries and countries with bilateral free trade agreements with Turkey are exempt from duties, American firms can still be competitive by offering financing alternatives to low-cost, credit-hungry Turkish buyers.  The U.S. Export-Import Bank (EXIM), Overseas Private Insurance Corporation (OPIC) and the U.S. Trade & Development Agency (USTDA) have a variety of financial vehicles to assist U.S. exporters and investors.  All imports of goods and services (except food) as well as contracts are subject to 18% value added tax (VAT) over the Cost Insurance Freight (CIF) price.  The subject amount is applicable to all, including domestic, companies.

Financing also includes GSM-102 export credit guarantees, which are available for most agricultural products.  CS Turkey urges U.S. exporters to utilize letters of credit and other methods to secure transactions when establishing a new relationship with a Turkish importer.

Prepared by the International Trade Administration. With its network of more than 100 offices across the United States and in more than 75 markets, the International Trade Administration of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.