Company Issues Fake or Inflated Invoices in Turkey: Risks for Foreign Shareholders and Directors 2026 Updated Guide

A Turkish company issues fake or inflated invoices. Learn the 2026 tax, criminal, customs and management-liability risks for foreign shareholders, directors and company managers and how personal liability is assessed.

A foreign shareholder or director may discover that a Turkish company in which they invested has issued fake, misleading or artificially inflated invoices. The problem can become significantly more serious than an ordinary accounting irregularity. Depending on the facts, the company may face tax assessments, tax-loss penalties, investigations under Turkish tax-criminal legislation, document seizures, forensic accounting examinations and potentially separate criminal investigations involving company executives. The key issue for a foreign shareholder or director is whether liability remains with the company or can extend personally to individuals involved in management. Turkish authorities should not treat foreign ownership itself as evidence of wrongdoing; personal exposure depends heavily on the individual’s role, authority, knowledge, conduct and connection with the disputed transactions.

What Is a Fake Invoice?

The legal characterization depends on the facts. A document can become problematic where it records a transaction that never occurred, falsely identifies the parties, misrepresents the underlying commercial activity or is otherwise created without the genuine transaction it purports to document.

This should be distinguished from an ordinary accounting mistake.

What Is an Inflated Invoice?

An inflated invoice generally involves a genuine underlying transaction but a disputed or deliberately overstated quantity, price, service value or other financial element.

For example, goods worth a particular amount may actually have been delivered while the invoice records a substantially higher amount without a genuine commercial basis.

Fake and Misleading Documents Should Be Distinguished

Not every inaccurate invoice presents the same legal issue. Authorities may examine whether the transaction was entirely fictitious or whether a genuine transaction was deliberately represented inaccurately.

That distinction can materially affect the investigation.

Why Are Inflated Invoices Used?

Authorities may investigate whether inflated invoices were allegedly used to increase expenses, reduce taxable profits, create artificial VAT deductions, transfer money between related companies, conceal unauthorized payments or manipulate corporate accounts.

The existence of an inflated invoice alone does not establish the purpose. The surrounding transactions must be investigated.

Can the Company Face Tax Assessments?

Yes. If tax authorities conclude that invoices improperly reduced taxable income or generated unjustified deductions, additional taxes and related financial consequences may arise.

The exact exposure depends on the relevant tax, period and transactions.

Can the Matter Become Criminal?

Potentially. Certain conduct involving false or misleading documents can move beyond administrative tax consequences and create criminal exposure under Turkish tax legislation.

Separate offenses may also become relevant depending on the surrounding facts, such as allegations involving fraud, forgery, money movements or other criminal conduct.

Does Every Incorrect Invoice Constitute a Crime?

No. Accounting mistakes, commercial disagreements and genuine valuation disputes should not automatically be treated as deliberate invoice fraud.

The authorities must examine the actual circumstances and applicable statutory elements.

Are Foreign Shareholders Personally Liable?

Share ownership alone should not automatically create criminal liability.

A foreign investor who merely owns shares but does not participate in invoicing, accounting, management or the disputed transactions presents a very different situation from a shareholder who actively directed the scheme.

Individual conduct must be examined.

Can a Foreign Director Be Criminally Investigated?

Yes, potentially. Directors and managers can be investigated where authorities believe they personally participated in, authorized, directed or knowingly facilitated unlawful conduct.

However, holding a management title does not automatically establish that the individual personally committed every offense attributed to the company.

Actual Authority Matters

Investigators may examine who had authority over accounting, finance, procurement, sales, banking and invoice approval.

The company’s formal signature circular and internal delegation structure can therefore become important evidence.

Actual Conduct Matters More Than Job Titles Alone

A director may formally hold broad powers but have no operational involvement in accounting. Conversely, another individual may exercise substantial control despite having a less prominent title.

The defense should reconstruct how the company actually operated.

Who Created the Invoice?

Identify the employee, accountant or department that generated the disputed document.

Electronic accounting systems may show usernames, timestamps, approvals and subsequent modifications.

These records should be preserved immediately.

Who Approved the Transaction?

The investigation should distinguish between creating an invoice, approving it, approving the underlying commercial transaction and authorizing payment.

Different people may perform these functions.

Foreign Directors Should Preserve Delegation Documents

Internal regulations, board resolutions, powers of attorney, job descriptions, signature authorities and organizational charts can demonstrate the actual allocation of responsibility.

These documents can become central where investigators assume that every board member knew about every transaction.

Independent Accountants May Become Relevant

Companies frequently use internal accounting teams or external professionals. Determine who prepared declarations, maintained books and processed the invoices.

This does not automatically transfer legal responsibility to the accountant, but it helps establish the factual chain.

Was There a Genuine Underlying Transaction?

This is one of the most important questions.

Collect purchase orders, contracts, delivery documents, warehouse records, transport documents, correspondence, acceptance reports and payment records showing whether goods or services actually existed.

Bank Records Should Be Examined

Trace the payment.

Determine whether the invoiced amount was actually paid, where it went and whether money subsequently returned to the company, shareholders, employees or related persons.

Circular money movements can attract particular scrutiny.

Cash Withdrawals Can Create Additional Questions

If money was transferred to a supplier and quickly withdrawn in cash, investigators may ask who ultimately received the funds.

The company should preserve all available financial records.

Related-Party Invoices Require Careful Review

Invoices between affiliated companies may receive additional scrutiny where authorities suspect artificial pricing or transactions without genuine economic substance.

Prepare contracts and commercial evidence supporting the relationship.

Transfer Pricing and Fake Invoicing Are Different Issues

A disagreement over whether related companies charged an arm’s-length price should not automatically be equated with a fictitious invoice.

The legal and evidentiary questions are different and should be analyzed separately.

What If the Invoice Price Is Simply Too High?

A high price alone does not necessarily establish criminal conduct.

Market conditions, scarcity, technical specifications, foreign exchange movements, delivery conditions and commercial risk can legitimately affect price.

The prosecution or tax authority’s theory should therefore be identified precisely.

Customs Risks Can Also Arise

If the disputed invoices concern imported goods, incorrect invoicing may also affect customs value.

This can lead to additional customs duties, penalties and potentially separate customs or smuggling-related investigations depending on the facts.

Import and Domestic Invoice Chains Should Be Compared

For imported products, compare the foreign supplier invoice, customs declaration, Turkish accounting records and subsequent domestic invoices.

Unexplained differences should be investigated.

VAT Exposure Can Be Significant

Authorities may question VAT deductions or other VAT treatment associated with invoices considered false or misleading.

The company should reconstruct each disputed invoice and related tax treatment transaction by transaction.

Corporate Tax Exposure Should Also Be Reviewed

If artificially inflated expenses reduced taxable profit, corporate income tax consequences may arise.

Tax exposure and criminal responsibility should nevertheless be analyzed separately.

Tax Penalties and Criminal Liability Are Separate Questions

The existence of an additional tax assessment does not automatically establish the criminal liability of a particular shareholder or director.

Similarly, challenging the tax assessment does not by itself resolve every potential criminal issue.

What If the Foreign Director Did Not Speak Turkish?

Language can become relevant when determining whether the director actually understood documents they signed.

However, inability to speak Turkish should not automatically be treated as a complete defense. The investigation should examine translations, advisers, communications and the circumstances surrounding the signature.

Never Sign Statements Without Understanding Them

A foreign director questioned by tax inspectors, police, prosecutors or other authorities should understand the document and allegations before signing a statement.

Interpreter accuracy can be critical.

Electronic Evidence Should Be Preserved

Emails, internal messages, accounting-system records, approval logs and corporate communications can establish who knew about the disputed transactions.

Companies should avoid deleting or modifying relevant electronic records once an investigation becomes foreseeable.

WhatsApp and Messaging Records May Become Relevant

Business instructions are frequently communicated through messaging applications. Where lawfully obtained and admissible, such communications can become significant evidence regarding knowledge and instructions.

Context matters; isolated messages should be assessed alongside the complete conversation and commercial records.

Search and Seizure May Occur

In serious investigations, authorities may seek company books, computers, phones or other evidence under applicable procedures.

The company should preserve legal objections concerning the scope and execution of investigative measures where appropriate.

Company Managers Should Avoid Coordinating False Stories

Once an investigation begins, employees and managers should not be instructed to create a uniform artificial explanation.

The defense should be built from authentic commercial and accounting records.

Do Not Backdate Contracts

Creating retrospective contracts, delivery notes or corporate resolutions to justify disputed invoices can substantially worsen the situation.

Existing deficiencies should be addressed transparently through lawful procedures.

Conduct an Internal Investigation

The company should immediately identify the disputed invoices and determine:

Who created them?

Who approved them?

Was there a genuine transaction?

Were goods delivered?

Were services actually performed?

Who received the money?

How were the invoices treated for tax purposes?

Which managers knew about them?

Create an Invoice-by-Invoice Matrix

For multiple transactions, prepare a structured table recording invoice date, supplier or customer, amount, underlying contract, delivery evidence, payment, accounting treatment, responsible employee and identified problem.

This can transform a broad allegation into manageable individual transactions.

Foreign Shareholders Should Separate Ownership From Management

A passive shareholder should collect evidence showing their actual corporate role.

Share certificates, board records, organizational charts and correspondence may demonstrate that the investor did not participate in daily financial operations.

Resignation Does Not Automatically End Historical Exposure

A former director can still be questioned about transactions occurring during their management period.

The relevant issue is the person’s role when the disputed conduct occurred.

New Directors Should Review Historical Transactions

A director appointed after the disputed period should establish the appointment date clearly.

Historical conduct should not automatically be attributed to someone who had no authority at the relevant time.

What If an Employee Acted Without Authorization?

Preserve evidence demonstrating the limits of that employee’s authority and how the unauthorized conduct was discovered.

Internal disciplinary records and corrective measures may also become relevant.

What If Senior Management Ordered the Invoices?

Individuals who received or implemented instructions should obtain independent legal advice where their interests may conflict with those of senior management or the company.

One lawyer may not always be able to represent every person where defenses conflict.

Company and Director Defenses May Diverge

The company may argue that an employee acted outside authority, while the employee may claim management instructed the conduct.

Potential conflicts should therefore be identified early.

Can Company Bank Accounts Be Frozen?

Depending on the nature and development of the investigation, asset-preservation measures may become relevant under applicable criminal procedures.

Any account restriction should be examined according to its specific legal basis.

Can Personal Assets Be Affected?

Personal measures require their own legal basis. Corporate allegations should not automatically be treated as sufficient to seize a foreign shareholder’s personal assets.

If a personal measure is imposed, the connection between the individual, alleged offense and property should be examined carefully.

Can the Company Correct Its Tax Position?

Depending on the stage and circumstances, Turkish tax legislation contains mechanisms that may become relevant to correction, payment and certain procedural consequences.

The strategy should be evaluated before making admissions or submissions because tax and criminal proceedings can interact.

Do Not Make an Unplanned Admission

A rushed attempt to “fix” accounting records may create statements later used in another proceeding.

Tax, criminal and corporate strategies should therefore be coordinated.

Expert Accounting Analysis Can Be Essential

Complex invoice investigations often require forensic accounting.

An expert can trace invoices, payments, inventory movements, VAT records and accounting entries to determine whether the authority’s assumptions match the actual transactions.

Commercial Valuation Evidence May Also Be Necessary

Where the allegation concerns inflated prices rather than fictitious transactions, comparable market prices, technical specifications and expert valuation evidence may help explain why the transaction price was commercially reasonable.

Foreign Parent Companies Should Review Group Exposure

If the Turkish subsidiary trades with foreign group companies, the parent should determine whether disputed invoices affect intercompany transactions.

Group accounting and transfer-pricing records should be preserved.

Do Not Destroy Documents After Learning of an Investigation

Document destruction can severely damage the company’s position and may create additional legal risks.

Issue appropriate preservation instructions internally.

What Should a Foreign Director Do If Summoned?

The director should determine which authority issued the summons, whether they are being questioned as a suspect or in another capacity, what period and transactions are involved, and whether interpretation will be required.

The relevant accounting and corporate records should be reviewed before the statement.

What Should a Foreign Shareholder Do If They Had No Management Role?

Collect evidence showing the limited role immediately rather than relying solely on the statement “I was only an investor.”

Corporate records should demonstrate the actual division between ownership and management.

Can a Director Blame the Accountant?

Simply stating that an accountant handled everything may be insufficient, particularly where the director personally approved suspicious transactions.

The defense should establish what information the director actually received and what responsibilities were delegated.

Can the Accountant Be Personally Investigated?

Potentially, depending on the accountant’s conduct and involvement. Professional title alone does not establish liability; individual acts and knowledge must be examined.

Evidence of Good-Faith Compliance Can Matter

Internal controls, external audits, professional advice, approval procedures and documented attempts to correct discovered problems may help establish the factual context surrounding the disputed transactions.

They do not automatically eliminate liability where deliberate misconduct is proven.

Review Limitation Periods Separately

Tax assessment periods, administrative penalties and criminal proceedings can involve different limitation rules.

The relevant period should therefore be calculated separately for each type of exposure.

Immediate Defense Strategy

When a Turkish company is accused of issuing fake or inflated invoices, foreign shareholders and directors should immediately preserve accounting and electronic records, identify the disputed invoices, reconstruct the underlying transactions, trace payments, establish each person’s actual authority, review tax consequences, identify potential criminal allegations, prevent document destruction, examine conflicts between company and individual defenses and prepare an evidence-based response before giving substantive statements.

Frequently Asked Questions

Is a foreign shareholder criminally liable because the company issued fake invoices?

No automatic criminal liability follows merely from share ownership. The individual’s conduct, authority, knowledge and participation must be examined.

Can a foreign director be investigated?

Yes. A director may be investigated where authorities believe the person participated in or knowingly facilitated the relevant conduct.

Does every incorrect invoice constitute invoice fraud?

No. Genuine accounting mistakes, valuation disagreements and deliberate false documentation must be distinguished.

Can an inflated invoice create criminal liability?

Potentially, depending on why it was inflated, how it was used and whether the statutory elements of an offense are established.

Can fake invoices lead to additional taxes?

Yes. Authorities may reassess taxes and question deductions or expenses associated with disputed invoices.

Can the same conduct lead to both tax and criminal proceedings?

Potentially. Tax assessments, administrative consequences and criminal proceedings can arise from overlapping facts but should be analyzed separately.

What if the director did not know about the invoices?

The actual management structure, delegation of authority, communications and approval records should be examined to determine whether the director was connected with the conduct.

What evidence is most important?

Contracts, invoices, delivery documents, bank records, accounting entries, warehouse records, electronic communications, approval logs and corporate authority documents can all become important.

Should disputed invoices simply be deleted from the accounting system?

No. Records should be preserved. Any correction should be carried out through lawful accounting and tax procedures rather than by deleting historical evidence.

What should a foreign director do first?

Identify the exact transactions and establish who created, approved and benefited from them. Personal criminal liability should be assessed from concrete conduct and evidence rather than assumed merely because the individual was a shareholder or director of the company.

Client-Focused Legal Support for Foreign Shareholders and Directors

Fake or inflated invoice allegations can expose a company and its executives to tax assessments, tax penalties, criminal investigations, customs disputes, forensic accounting reviews, asset measures and personal-liability allegations. Fırat Fesih Kaya Law Office assists foreign shareholders, directors, managers and foreign-owned companies facing complex corporate, tax and criminal investigations in Turkey. Lawyer Fırat Fesih Kaya provides legal assistance in reviewing disputed transactions, coordinating accounting and financial evidence, preparing directors and foreign executives for investigative proceedings, challenging unlawful measures and developing coordinated corporate and individual defense strategies.

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