Royalties and Licence Fees in Turkish Customs Value: Customs Law Article 27 (2026)
Short and Clear Answer
Customs Law No. 4458 Article 27 requires qualifying royalties and licence fees to be added to the price actually paid or payable when they relate to the imported goods, are paid as a condition of sale under the customs rules and are not already included in the price. The label used in a licence agreement does not decide the result. The legal test follows the real payment, the licensed right, the imported goods and the sale relationship.
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Article 27 does not add every intellectual-property payment. The Ministry of Trade customs-value guidance expressly distinguishes payments for the right to reproduce imported goods in Turkey and certain distribution or resale rights from qualifying additions. Foreign brand owners and Turkish importers therefore need a contract-by-contract analysis and a defensible allocation where a royalty covers both imported and non-imported activities.
Article 27 focuses on the legal and economic connection between the royalty, the imported goods and the sale.
Contents
1. Article 27 Is the Statutory Starting Point
Customs Law Article 24 starts customs value with the price actually paid or payable for the sale for export to Turkey. Article 27 then requires specified additions when their statutory conditions are satisfied and the amounts are not already included in that price. Royalties and licence fees are one of those legally defined categories.
The analysis is therefore not whether a company has an intellectual-property agreement. The question is whether the payment falls within Article 27 for the specific imported goods. The importer must establish what right is licensed, what goods are imported, how the payment is calculated and whether the payment is connected to the sale.
A separate invoice does not remove a payment from customs value. Likewise, including a royalty in the goods invoice does not create a second addition. The declared value must include the legally required amount once, through a transparent calculation.
2. Trademark, Patent, Technology and Know-How Rights Require Separate Analysis
Royalty agreements cover different legal rights. A trademark royalty paid for branded finished goods raises different customs questions from a technology licence used to manufacture goods in Turkey after importation. Patent, design, software, know-how and copyright arrangements each require examination of what the Turkish buyer receives.
The customs file should describe the right in factual terms rather than relying only on contract headings. If a fee called a management fee actually grants the right to use a trademark on imported goods, its customs treatment follows substance. If a fee called royalty pays for a service unrelated to imported goods, the label alone does not make it dutiable.
Foreign licensors should coordinate IP drafting with customs specialists before imports begin. A licence contract written without reference to supply arrangements can create uncertainty about the condition-of-sale test and allocation.
3. The Royalty Must Relate to the Imported Goods
A qualifying Article 27 addition requires a connection between the royalty or licence fee and the imported goods. The company must identify whether the payment is for rights embodied in, used in, necessary for or commercially attached to those goods under the customs rules.
A broad regional licence can cover imported finished products, domestic manufacturing, marketing services and rights in other countries. In that situation, the Turkish importer cannot simply add the entire global royalty or exclude the entire amount. The part relating to imported goods must be identified through a legally defensible allocation.
Product schedules, SKU lists, sales reports and contract annexes should connect the licensed rights to imported merchandise. Where a royalty applies only to locally manufactured products, the file should demonstrate that imported goods are outside the charging base.
4. Condition of Sale Is a Core Legal Test
Article 27 requires the royalty or licence fee to meet the condition-of-sale requirement in the customs framework. This test asks whether the buyer must pay the royalty in order to purchase the imported goods under the real commercial arrangement.
The answer is not limited to whether the sale contract contains the word condition. Customs examines the relationship between the sale agreement, licence agreement, supplier, licensor and rights holder. Contract termination rights, supplier approval, trademark authorization and group control can all be relevant facts.
The importer should prepare a written analysis explaining why the payment is or is not a condition of the imported-goods sale. That analysis should quote the relevant clauses and map the commercial chain. A one-sentence statement that the agreements are separate is not enough where the agreements operate together.
5. A Third-Party Licensor Does Not Automatically Remove the Royalty
A royalty can be paid to a person other than the foreign seller. Article 27 analysis therefore cannot stop when the seller and licensor have different names. The legal and commercial relationships among the parties must be examined.
For multinational groups, the trademark owner may be one company, the manufacturer another, the regional seller a third and the Turkish importer a fourth. The customs file should show ownership and control links, supply approvals and the contractual consequences if the royalty is not paid.
Where the licensor is genuinely independent of the seller, that fact is relevant but still not a substitute for the statutory tests. The imported-goods relationship and condition-of-sale analysis remains necessary.
6. Rights to Reproduce and Certain Distribution Payments Are Distinguished
The Ministry of Trade’s customs-value guidance states that charges for the right to reproduce imported goods in Turkey are not added to the price actually paid or payable in determining customs value. It also explains that payments for the right to distribute or resell imported goods are not added where those payments are not a condition of the sale for export to Turkey.
These rules must be applied precisely. A reproduction right is not the same as a trademark right attached to finished imported goods. A distribution right that is independent of the sale is not the same as a payment the buyer must make in order to obtain the goods.
Contracts should separate different licensed rights and calculation bases where the commercial arrangement genuinely distinguishes them. Artificial wording that does not match the actual transaction does not control customs treatment.
7. Mixed Royalties Require a Defensible Allocation
Many licence agreements cover both imported goods and other activities. An allocation is required where only part of the royalty is legally relevant to customs value. The allocation must be based on objective, quantifiable data.
Possible factual bases include imported-product net sales, units, separately stated royalty rates or another contractually supported measure that accurately tracks the licensed rights. The company should explain why the selected allocation reflects the agreement and preserve the source data used for each customs period.
An arbitrary percentage selected after an audit begins is weak evidence. The method should exist as part of the company’s normal customs compliance process and reconcile to accounting records.
8. Royalties Calculated After Importation Still Require Customs Control
A royalty is often calculated monthly, quarterly or annually as a percentage of net sales after the imported goods are resold. The final amount may therefore be unknown when the import declaration is registered. That timing does not eliminate Article 27.
The importer must operate a process for provisional information, later reconciliation and any customs procedure required when the actual amount becomes known. The calculation should link royalty reports to the imported products and relevant customs declarations.
Credit notes, returns and discounts affecting the royalty base should be treated consistently. A customs reconciliation that cannot be tied back to the accounting royalty report is difficult to defend.
9. Related-Party Licences Need Both Article 24 and Article 27 Review
Where seller, licensor and Turkish importer are related, two distinct valuation issues arise. Article 24 asks whether the relationship affected the goods price. Article 27 asks whether a separate royalty or licence fee must be added. One analysis does not replace the other.
A group might price the goods at a lower margin because income is earned through a royalty. Customs needs to see the total commercial structure. Transfer-pricing documentation can help explain the model but does not itself determine customs value.
Foreign-owned importers should reconcile the goods agreement, licence agreement and transfer-pricing policy. Inconsistent descriptions of the same transaction across those documents are a predictable audit issue.
10. Documents for a Royalty Customs File
The file should include the licence agreement, amendments, sales agreement, distribution agreement, supplier approvals, royalty invoices, royalty calculations, product lists, IP ownership records, payment evidence and any transfer-pricing documentation relevant to the commercial structure.
Where an allocation is used, preserve the formula and source data. Where the company relies on an exclusion for reproduction or independent distribution rights, preserve the clauses proving the nature of the right and the absence of a condition-of-sale connection where required.
Customs Law Article 11 permits information and document requests, while Article 13 governs retention obligations. A Turkish importer should therefore have access to documents held by the foreign licensor before an audit request arrives.
11. Omitted Royalties Can Trigger Article 234(1)(b)
If a royalty required by Article 27 is omitted, the customs value can be lower than the value determined under Articles 23–31. For ad valorem duties, Article 234(1)(b) requires collection of the tax difference and prescribes an administrative fine equal to three times that difference when its elements are present.
The exposure can repeat across every declaration affected by the licence agreement. A single annual royalty arrangement can therefore create a large customs assessment if the compliance process fails for an extended period.
Criminal liability under Anti-Smuggling Law No. 5607 requires separate statutory elements. An Article 27 disagreement does not automatically establish a smuggling offence.
12. How to Respond to a Turkish Customs Royalty Audit
The response should separate the legal tests: relation to imported goods, condition of sale, amount, allocation and whether the fee is already included in the price. Each conclusion should be tied to contract clauses and payment records.
If customs treats the full royalty as dutiable but the agreement covers mixed rights, the importer should present the objective allocation and source data. If customs alleges a condition of sale, the company should map the contractual consequences of non-payment and the relationships between seller and licensor.
Any resulting customs decision or penalty can be challenged through Customs Law Article 242 within the fifteen-day administrative objection period. The objection should identify the Article 27 issue precisely rather than relying on generic tax arguments.
Official and Related Sources
Frequently Asked Questions
Are all royalties added to Turkish customs value?
No. Article 27 requirements must be met for the specific payment.
Does a trademark royalty on imported branded goods matter?
It must be tested for its relation to the imported goods and the condition-of-sale requirement under Article 27.
What if the licensor is not the seller?
The third-party payment can still require analysis. The commercial and legal relationships among seller, licensor and importer must be examined.
Are reproduction rights added?
The Ministry guidance states that charges for the right to reproduce imported goods in Turkey are not added to the price actually paid or payable.
Are independent distribution rights added?
Payments for distribution or resale rights are not added where they are not a condition of the sale for export to Turkey.
Can a mixed royalty be allocated?
Yes. The allocation must be objectively supportable and tied to the rights and imported goods.
What penalty applies when a dutiable royalty was omitted?
Article 234(1)(b) applies to deficient customs value when its statutory elements are present.
What is the objection period?
Article 242 provides fifteen days from notification for the administrative objection.
Lawyer Review and E-E-A-T
Prepared by: Attorney Halil BAKIRCI – Mersin Bar Association, Registration No. 3472
Legal review: Bakırcı & Keskin Law Office.
This guide was reviewed against Customs Law No. 4458 Articles 11, 13, 24, 27, 234 and 242 and the Ministry of Trade’s customs-value guidance.
Contact Us About Customs Royalties in Turkey
Last legal-source review: 12 September 2026.
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