BSMV charged on loan interest and fees forms part of the cost of borrowing. As these transactions are exempt from VAT, BSMV takes the place of VAT in the financial sector.
Source: 6802 sayılı Gider Vergileri Kanunu
Related terms
Value added tax (VAT)An indirect tax levied on the value added at each stage of the supply of goods and services and passed on to the final consumer.LeverageThe extent to which a company uses debt to finance its assets or investments.RefinancingRepaying existing debt with new financing, usually on more favourable terms.Advance taxTax paid in advance during the year by income and corporate taxpayers, in quarterly periods, on current-period earnings.Advance tax rulingA written explanation issued by the tax administration upon a taxpayer's written request about its own tax position or matters it considers unclear.Arm's length principleThe principle that transactions between related persons should be carried out at the prices and on the terms that would apply between independent parties with no such relationship.
Last updated: November 8, 2026 · This definition is for general information only.