Unexpected Turkish import taxes make a supply contract significantly more expensive. Learn when a foreign buyer may seek termination, adaptation or renegotiation based on contract terms, Incoterms, change-in-law and hardship rules.

A foreign buyer may sign a supply contract expecting a particular landed cost, only to discover before or during importation into Turkey that substantial additional taxes or customs charges apply.

The additional cost may result from:

• Additional customs duty;
• Anti-dumping duty;
• Safeguard measure;
• Incorrect tariff assumptions;
• Origin-related treatment;
• Import VAT;
• Another import-related financial obligation.

The buyer may then ask:

“Can we terminate the supply contract because the transaction is now much more expensive than expected?”

The answer is not automatically yes.

Unexpected import taxes do not, by themselves, create a universal right to terminate a supply contract. The outcome depends principally on the contract, allocation of customs risk, applicable Incoterm, governing law, foreseeability of the tax and the magnitude of the economic change.

Where Turkish law governs, hardship principles under Article 138 of the Turkish Code of Obligations may also become relevant in exceptional circumstances if the statutory conditions are satisfied.

The recommended strategy is:

Verify the tax → determine why it applies → review the contract → identify who assumed customs risk → check change-in-law, hardship and termination clauses → determine whether the cost was foreseeable → calculate the economic impact → consider adaptation or renegotiation → terminate only where a sound contractual or legal basis exists.

1. First Confirm That the Tax Is Actually Payable

Before considering termination, verify the customs calculation.

The supposed unexpected tax may result from:

• Incorrect tariff classification;
• Incorrect origin;
• Incorrect additional customs duty;
• Incorrect application of an anti-dumping measure.

Do not terminate a valuable commercial contract because of a customs assessment that may itself be wrong.

2. Identify the Exact Import Charge

Determine whether the cost is:

ordinary customs duty

additional customs duty

anti-dumping duty

safeguard measure

import VAT

or another import charge.

Different measures can have different legal and contractual consequences.

3. Verify the Tariff Classification

A classification change can dramatically increase landed cost.

Obtain:

• Technical specifications;
• Composition;
• Function;
• Manufacturer information;
• Product drawings.

Determine whether Customs is using the correct tariff code.

4. Verify Origin

Origin may affect:

• Preferential treatment;
• Additional customs duties;
• Anti-dumping measures.

The shipping country is not necessarily the customs origin.

5. Calculate the Actual Financial Impact

Do not base a termination decision on a percentage alone.

Prepare:

Contract price

original expected import cost

versus

actual import cost after the unexpected measure.

Then calculate the effect on:

• Gross margin;
• Resale price;
• Financing;
• Overall transaction profitability.

6. Read the Supply Contract Before Taking Action

Review:

• Price clause;
• Customs-duty clause;
• Tax clause;
• Incoterm;
• Change-in-law clause;
• Hardship clause;
• Force majeure;
• Termination clause;
• Governing law;
• Dispute-resolution clause.

The contract may already allocate this risk.

7. Determine Who Contractually Bears Import Taxes

If the contract expressly states:

“All import duties and taxes shall be borne by the buyer,”

the buyer may have assumed substantial customs-cost risk.

If the seller expressly assumed import duties, the analysis may be different.

8. Identify the Importer of Record

The entity legally responsible to Turkish Customs may not be the party that ultimately bears the cost under the supply agreement.

Separate:

customs liability

from

contractual cost allocation.

9. Incoterms Can Be Important

The agreed delivery term can indicate which party is responsible for import clearance and import-related costs.

However, Incoterms should be read together with the rest of the contract.

A separately negotiated customs or tax clause may materially affect the result.

10. Check Which Incoterms Version Applies

The contract should ideally identify the applicable version, for example Incoterms 2020.

Do not analyze rights based merely on an abbreviation appearing on an invoice.

11. DDP Can Produce a Different Risk Allocation

Under a DDP-type arrangement, import obligations are generally allocated more heavily to the seller than under many other delivery structures.

Nevertheless, the entire agreement and the practical Turkish importer structure must be reviewed.

12. CIF Does Not Mean the Seller Bears Every Import Cost

A common commercial misunderstanding is that because the seller arranges freight and insurance, the seller must also bear Turkish import taxes.

That conclusion does not automatically follow.

The actual delivery term and contract should be examined.

13. Check the Fixed-Price Clause

A fixed price can be commercially important.

However, ask whether the contract price is:

• Product price only;
• Landed price;
• Inclusive of duties;
• Subject to tax adjustment.

The wording matters.

14. Check the Change-in-Law Clause

This is often one of the most important provisions.

A clause may specifically address:

• New taxes;
• Increased customs duties;
• Anti-dumping measures;
• Government restrictions;
• Regulatory changes.

The contract may provide for:

price adjustment

renegotiation

or

termination.

15. A Change-in-Law Clause May Contain a Threshold

For example, termination may become available only where the regulatory change increases total contract cost above a specified percentage.

Calculate the threshold carefully.

16. Check Whether the Tax Existed When the Contract Was Signed

There is a major difference between:

a genuinely new tax introduced after signing

and

an existing tax that the buyer simply failed to identify during pricing.

The second situation may significantly weaken an unforeseeability or hardship argument.

17. Commercial Miscalculation Is Not Automatically a Termination Ground

If the applicable import duty was publicly in force when the contract was signed, the buyer may have difficulty arguing that the cost was an extraordinary subsequent event.

Customs due diligence before signing is therefore important.

18. Check the Effective Date of a New Measure

If the measure was introduced after signing, identify:

• Publication date;
• Effective date;
• Shipment date;
• Arrival date;
• Customs declaration date.

This timeline may determine both customs liability and contractual remedies.

19. Check Transitional Rules

A new customs measure may contain transitional treatment for qualifying goods.

For example, legal analysis may be necessary for goods:

• Already shipped;
• In transit;
• Already under a customs procedure.

Do not assume either that grandfathering exists or that it does not.

20. Is the New Tax Force Majeure?

Usually, increased cost should not automatically be equated with force majeure.

Force majeure commonly concerns events preventing performance rather than merely making performance less profitable.

However, the contractual definition may be broader.

Read the clause.

21. Government Measures May Be Expressly Included

Some contracts define force majeure to include:

• Government action;
• Import prohibition;
• Sanctions;
• Regulatory restrictions.

Even then, determine whether the particular measure actually prevents contractual performance or merely increases cost.

22. Hardship May Be More Relevant

Unexpected import taxes often create an economic imbalance, not impossibility.

That makes hardship potentially more relevant than force majeure.

Check whether the contract contains a hardship clause.

23. Turkish Code of Obligations Article 138 May Become Relevant

Where Turkish law governs, Article 138 provides a statutory framework for adaptation of contracts where extraordinary circumstances arising after contract formation fundamentally alter the contractual equilibrium under the required conditions.

The provision is not an automatic escape mechanism for an unprofitable contract.

Its conditions must be established carefully.

24. The Event Generally Must Not Be Attributable to the Buyer

A buyer cannot normally create its own customs problem and then characterize the resulting expense as an external hardship.

For example, an incorrect declaration caused by the buyer may require a different analysis.

25. Foreseeability Is Critical

Ask whether a prudent commercial party could reasonably have anticipated the change when the contract was signed.

Relevant evidence may include:

• Pending trade-defense investigation;
• Announced regulatory proposal;
• Existing government measures;
• Industry warnings;
• Prior temporary measures.

The more foreseeable the risk, the weaker a hardship argument may become.

26. The Economic Impact Must Be Serious

A minor increase in import cost is unlikely to justify drastic contractual remedies.

Calculate whether the new charge fundamentally changes the transaction.

For example:

Original landed cost: USD 1 million

Unexpected import charge: USD 20,000

is very different from:

Unexpected import charge: USD 400,000.

27. Contract Adaptation May Come Before Termination

Where the legal conditions are satisfied, the appropriate remedy may initially involve seeking adaptation of the contractual relationship rather than immediately ending it.

Possible adjustments include:

• Price reduction;
• Cost sharing;
• Revised quantities;
• Revised delivery schedule.

28. Termination May Be a Secondary Remedy

Depending on the contract and governing law, termination may become relevant where:

• Express termination rights exist;
• Change-in-law threshold is reached;
• Adaptation is unavailable or insufficient;
• Another contractual ground exists.

Do not assume hardship automatically means immediate termination.

29. Do Not Send a Termination Notice Prematurely

An unjustified termination can expose the buyer to claims for:

• Unpaid purchase price;
• Lost profit;
• Storage;
• Resale losses;
• Contractual penalties.

Obtain a legal basis before sending the notice.

30. Review Notice Requirements

A termination clause may require:

• Written notice;
• Specific delivery method;
• Cure period;
• Negotiation period;
• Supporting evidence.

Failure to follow the notice procedure can weaken the termination.

31. Check Mandatory Renegotiation Requirements

Some contracts require the parties to negotiate in good faith before termination becomes available.

Follow that sequence.

32. Preserve the Right to Terminate During Negotiations

If negotiations begin, avoid correspondence that unintentionally waives contractual rights.

A reservation-of-rights approach may be appropriate.

33. Do Not Accept the Goods Without Considering Contractual Consequences

Depending on the governing law and contract, acceptance, payment or continued performance may affect later arguments.

Coordinate customs release decisions with the contractual strategy.

34. But Do Not Leave Goods at the Port Indefinitely

Refusing to clear goods can generate:

• Storage;
• Demurrage;
• Detention;
• Cargo deterioration.

The buyer has a duty to consider mitigation.

35. Mitigation Is Important

Even where the buyer has a valid claim against the seller, avoid unnecessarily increasing the loss.

Potential mitigation may include:

• Prompt customs challenge;
• Alternative lawful customs procedure;
• Cost-sharing negotiations;
• Alternative sale arrangements.

36. Paying Customs Does Not Necessarily Waive Contractual Rights

A buyer may need to pay the disputed customs amount to release commercially important goods.

That payment does not necessarily determine the final contractual allocation between buyer and seller.

Document the position carefully.

37. Preserve Evidence of the Unexpected Cost

Keep:

• Customs assessment;
• Contract;
• Purchase orders;
• Applicable trade measure;
• Payment records;
• Customs declaration;
• Shipping documents.

The buyer must prove what changed and when.

38. Preserve Pre-Contract Customs Assumptions

Keep pricing models and correspondence showing:

• Expected customs rate;
• Expected landed cost;
• Seller representations.

This may become relevant to the contractual dispute.

39. Seller Representations Can Matter

If the seller expressly represented that the goods would attract a particular customs treatment, examine whether that representation became:

• Contractual warranty;
• Misrepresentation;
• Pricing assumption.

Do not assume every informal statement creates contractual liability.

40. Consider the CISG

An international supply agreement may fall within the CISG depending on the parties, applicable law and contractual exclusions.

The relationship between the CISG, contractual risk allocation and applicable domestic law should be considered before termination.

41. Check the Dispute-Resolution Clause

The dispute may need to be resolved before:

• Turkish courts;
• Foreign courts;
• International arbitration.

The buyer should know the forum before issuing a termination notice.

42. Arbitration Clauses May Require Emergency Strategy

Where high-value goods are already in Turkey and the contractual dispute is urgent, assess whether interim or emergency relief is available under the applicable dispute-resolution mechanism.

43. Consider Renegotiation Before Destroying a Valuable Supply Relationship

Possible commercial solutions include:

• 50/50 cost sharing;
• Price reduction;
• Credit against future orders;
• Reduced future quantities;
• Alternative origin-compliant sourcing.

Any agreement should be documented.

44. Future Contracts Should Allocate Customs Risk Expressly

Include clear provisions covering:

• New customs duties;
• Anti-dumping measures;
• Safeguards;
• Import taxes;
• Regulatory changes;
• Price-adjustment thresholds;
• Renegotiation;
• Termination.

This prevents the same dispute from recurring.

45. Immediate Strategy When Unexpected Import Taxes Appear

The recommended sequence is:

Verify the tax

→ verify classification and origin

→ calculate the real additional cost

→ review the supply contract

→ identify the Incoterm

→ determine who assumed customs risk

→ review change-in-law and hardship clauses

→ determine foreseeability

→ review Article 138 where Turkish law applies

→ consider adaptation and renegotiation

→ comply with notice requirements

→ terminate only where a defensible legal basis exists.

25-Point Contract Termination Checklist

1. Obtain the supply contract.
2. Review purchase orders.
3. Identify the unexpected tax.
4. Verify tariff classification.
5. Verify origin.
6. Check anti-dumping measures.
7. Calculate additional cost.
8. Identify the importer.
9. Identify the Incoterm.
10. Check the Incoterms version.
11. Review customs-duty allocation.
12. Review the fixed-price clause.
13. Review the tax clause.
14. Review change-in-law provisions.
15. Review hardship.
16. Review force majeure.
17. Review termination rights.
18. Determine foreseeability.
19. Check transitional customs rules.
20. Identify governing law.
21. Review the CISG.
22. Identify dispute resolution.
23. Follow notice requirements.
24. Consider adaptation or renegotiation.
25. Terminate only after assessing potential counterclaims.

Frequently Asked Questions

1. Can unexpected import taxes automatically allow a buyer to terminate a supply contract?

No. The contract, governing law, allocation of customs risk and circumstances of the tax increase must be examined.

2. What if the tax was introduced after the contract was signed?

That can strengthen a change-in-law or hardship argument, but it does not automatically create a termination right.

3. What if the tax already existed but the buyer did not know about it?

A failure to identify an existing import tax may be treated differently from a genuinely new regulatory measure introduced after contracting.

4. Can a major customs increase qualify as force majeure?

Not automatically. Increased cost is generally different from impossibility, although the contractual definition of force majeure may affect the analysis.

5. Can Article 138 of the Turkish Code of Obligations apply?

Potentially, where Turkish law governs and the statutory conditions for hardship and adaptation are satisfied. The provision does not automatically apply whenever a contract becomes less profitable.

6. Can the buyer seek a price adjustment instead of termination?

Potentially, yes. Contractual change-in-law or hardship provisions, negotiated amendments or applicable legal adaptation mechanisms may support a price adjustment.

7. What if the seller agreed to bear import duties?

The seller’s contractual undertaking may materially change the result. The exact wording and delivery structure should be reviewed.

8. Should the buyer refuse to clear the goods?

Not automatically. Leaving goods uncleared can generate substantial storage, demurrage and other losses.

9. Can the buyer pay Customs and still claim the cost from the seller?

Potentially, depending on the contractual allocation. Payment to Customs and ultimate contractual responsibility are separate questions.

10. What is the biggest mistake in this situation?

Terminating the supply contract immediately without first confirming that the import tax is legally correct and determining whether the contract actually places the customs-risk burden on the buyer or seller.

Client-Focused Legal Support for Unexpected Import Tax and Supply Contract Disputes

Unexpected import taxes may create disputes concerning:

Additional customs duties

Anti-dumping duties

Supply contract termination

Incoterms

Change-in-law clauses

Hardship

Contract adaptation

Price adjustment

and international commercial arbitration or litigation.

Fırat Fesih Kaya Law Office assists foreign buyers, international suppliers, importers and multinational companies facing supply-contract disputes arising from unexpected customs duties and import taxes in Turkey.

Lawyer Fırat Fesih Kaya provides legal assistance in reviewing customs assessments and international supply contracts, determining customs-cost allocation, analyzing hardship and change-in-law provisions, negotiating price adjustments and pursuing termination, litigation or arbitration where legally appropriate.

Phone: +90 312 434 22 22
Mobile: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yıldırım Tower, Office No:148, 06520 Balgat, Çankaya, Ankara, Turkey