Taxes and Funds Collected from Consumption
Electricity Consumption Tax (ECT or BTV) pursuant to Article 34 of the Municipal Revenues Law No. 2664
TRT Share
Energy Fund
Value Added Tax (VAT)
2. Taxes Collected on Profits
Corporate Tax (and Advance/Provisional Tax)
3. Taxes Collected on Transactions
Stamp Duty
Fees/Charges
What is the Electricity Consumption Tax (ECT)?
Electricity Consumption Tax (ECT or BTV):
This is a fee transferred to the municipality in the area where the electricity meter is located.
It is collected at the rate of:
5% of the consumption amount for residential and commercial consumers,
1% for the industrial sector.
The Electricity and Gas Consumption Tax (Municipal Consumption Tax) entered into force with Article 35 of the Municipal Revenues Law No. 2664 (1981).
Who is the Taxpayer of the Electricity Consumption Tax?
The taxpayers are the consumers of electrical energy.
Who is Responsible for the Electricity Consumption Tax?
Electricity supply companies are responsible for collecting this tax together with the sales price and for transferring it to the relevant municipality.
How is the Tax Base of the Electricity Consumption Tax Calculated?
The tax base is the electricity sales price, excluding charges related to electricity transmission, distribution, and retail sales services.
Taxes, funds, and shares cannot be included in the tax base.
According to Article 4/c of the Law No. 3093 on the Revenues of the Turkish Radio and Television Corporation (1984):
“Legal entities holding a license that sell electrical energy to final consumers shall separately indicate on their invoices a share amounting to two percent of the electricity sales price (excluding charges related to transmission, distribution, and retail services, as well as VAT, other taxes, funds, shares, and similar deductions) and shall transfer these amounts to the Turkish Radio and Television Corporation (TRT).”
Organized Industrial Zone (OIZ) legal entities do not pay a separate TRT share for electricity supplied to their members from suppliers as eligible consumers.
With the Law No. 7033, published in the Official Gazette on 01.07.2017, which introduced amendments to certain laws and decrees to promote industrial development and production, the phrase added to Article 4/2-C of Law No. 3093 abolished the TRT share for electricity subscribers holding an Industrial Registration Certificate.
The Law on Amendments to Certain Laws, which includes the regulation abolishing the TRT share collected from electricity sales, was adopted by the Grand National Assembly of Turkey (TBMM) and entered into force upon publication in the Official Gazette on 25.12.2021, thereby completely abolishing the TRT share on electricity bills.
What is the Electricity Energy Fund?
The Energy Fund was introduced by Provisional Article 4 of Law No. 3096.
The fund was established under the Ministry of Energy to finance the expenses of the Electricity Energy Fund, which possesses legal personality. Its purpose is to:
support research, development, studies, project and inspection activities in the electricity sector,
provide financial support for facilities to be established, and
ensure price stability in electricity energy.
The fund is collected at a rate of 1% based on the retail electricity sales price and the loss-leakage charge.
Value Added Tax (VAT) on Electricity Bills
Who is the VAT Taxpayer on Electricity Bills?
Licensed legal entities that sell electricity to final consumers.
What is the VAT Rate on Electricity Bills?
18% on electricity energy sales.
What is the VAT Tax Base on Electricity Bills?
The VAT base consists of the total of:
Electricity consumption price
Charges related to transmission, distribution, and retail sales services
Energy Fund
TRT Share
(The TRT share was completely abolished on 25.12.2021.)
Declaration Period
The VAT calculated and separately indicated on invoices is declared monthly through VAT returns by taxpayers.
Corporate Tax
The Corporate Tax Law does not include any specific provisions applicable exclusively to companies operating in the electricity market.
Accordingly:
There are no corporate tax exemptions or special profit-based incentives specifically granted to legal entities operating in the sector.
The profits of companies operating in the electricity sector are subject to corporate tax at the general rate.
What Transaction-Based Taxes Are Applied to Electricity Bills?
Stamp Duty on Electricity Bills
Pursuant to Provisional Article 4/1-b of Law No. 6446, transactions related to electricity generation facilities that enter operation for the first time until 31.12.2020 are exempt from fees and stamp duty during the investment period.
According to the General Communiqué on Stamp Duty Law (Serial No. 62), stamp duty at a rate of 9.48 per thousand was applied in 2018 to wholesale and retail electricity and natural gas sales contracts.
If you have questions such as:
What is Electricity Consumption Tax (ECT)?, Which taxes are collected from electricity bills?, or Where are the taxes collected from electricity bills transferred?
you may contact Aykut Law & Consultancy, which operates throughout Türkiye, particularly in Izmir.