False Invoice Investigations in Turkey: Risks for Foreign Company Directors 2026

Foreign company director facing a false invoice investigation in Turkey? Learn about criminal liability, tax inspections, supplier investigations, director responsibility, genuine transaction evidence and defense strategies under Turkish law in 2026.

A foreign director of a Turkish company may unexpectedly learn that invoices recorded months or years earlier are being investigated by Turkish tax authorities. Frequently, the investigation begins not because the foreign-owned company was originally targeted, but because one of its suppliers has been identified as presenting a risk of issuing false invoices.

The consequences can be serious. A tax inspection can develop into additional tax assessments, administrative penalties and, where the statutory conditions are considered to exist, a criminal investigation concerning tax evasion offences.

Under Article 359 of the Turkish Tax Procedure Law, a false document is a document created as though a transaction or situation existed even though it did not. The provision criminalizes specified conduct involving the creation or use of such documents.

However, the presence of a disputed invoice in a company’s accounting system does not automatically establish the personal criminal liability of every foreign shareholder or director.

For a foreign company director, the investigation should instead answer several separate questions:

Was the underlying transaction genuine? Who selected the supplier? Who approved the purchase? Who received the goods or services? Who submitted the invoice to accounting? Who controlled the tax declarations? What did the foreign director personally know and do?

These questions should form the foundation of the defense.

Why Do False Invoice Investigations Affect Foreign Directors?

A foreign director may become involved because their name appears in corporate records as:

• Board member
• Managing director
• Authorized signatory
• General manager
• Company representative
• Bank signatory
• Shareholder-director
• Branch representative

But formal corporate status and personal criminal conduct are not necessarily the same thing.

For example, a foreign investor may sit on the board while procurement, accounting and supplier relations are handled entirely by local management.

Alternatively, the foreign director may personally negotiate purchases, approve suppliers and authorize every payment.

Those two situations should not be treated identically.

What Is a False Invoice Under Turkish Law?

The statutory definition is important.

Article 359 of the Tax Procedure Law defines a false document by reference to a transaction or situation that did not actually exist but was documented as if it did. The same provision regulates criminal consequences concerning specified false-document conduct.

Therefore, the first defense question should often be:

Did the commercial transaction actually occur?

If goods were genuinely purchased and delivered, or services were genuinely performed, the factual analysis can be fundamentally different from a transaction invented solely for accounting or tax purposes.

False Invoice and Misleading Invoice Should Be Distinguished

Not every inaccurate invoice necessarily represents an entirely fictitious transaction.

There is an important difference between:

a transaction that never happened

and

a genuine transaction inaccurately reflected in a document.

This distinction can affect both the tax analysis and the criminal case.

A defense should therefore identify precisely what the tax authority alleges rather than using “false invoice” as a generic description for every disputed document.

How Does a False Invoice Investigation Usually Begin?

A common scenario is:

Supplier investigated → Supplier’s invoices examined → Customer companies identified → Recipient company reviewed → Tax inspection → Potential criminal referral.

For example, tax authorities investigate Supplier A.

They may examine whether Supplier A had:

• Employees
• Premises
• Inventory
• Equipment
• Commercial capacity
• Purchases corresponding to its sales
• Transportation activity
• Genuine customers
• Bank movements

The Revenue Administration’s current guidance states that determining whether a document is false requires factual investigation, including whether genuine activity existed, whether goods actually moved, inventory or production analysis, transportation, payment and collection evidence, commercial relationships and other relevant information. It also states that a mere complaint or notification, without additional findings, is insufficient for the specified treatment.

This is highly relevant to foreign company directors.

The investigation should be evidence-based.

Supplier Investigation Does Not Automatically Prove Customer Guilt

Suppose a foreign-owned construction company purchased steel from Supplier A.

Two years later, Supplier A becomes the subject of a false-document investigation.

That development may justify examining the transaction.

But it does not by itself answer:

Was the steel delivered?

Did the buyer know about any irregularity?

Who selected Supplier A?

Where was the steel used?

Was payment genuine?

Did the foreign director participate?

Each question requires evidence.

The Reality of the Transaction Can Be the Core Defense

The strongest defense frequently reconstructs the commercial transaction independently of the disputed invoice.

Relevant evidence may include:

• Contract
• Purchase order
• Quotation
• Proforma invoice
• Delivery note
• Transportation records
• Warehouse records
• Customs records
• Bank transfers
• Inventory movements
• Production records
• Installation documents
• Project records
• Emails
• Messages
• Photographs
• Technical documents
• Witnesses

The objective should be to demonstrate:

Commercial need → Order → Supplier → Delivery or service → Payment → Business use → Accounting.

Example: Machinery Purchase

Assume a foreign-owned factory receives an invoice for industrial machinery worth TRY 8 million.

The supplier is later investigated.

The defense should not rely solely on:

“We paid the invoice.”

Instead, establish whether the machinery can be traced through:

Purchase contract → Transport → Factory delivery → Installation → Serial number → Fixed-asset registration → Production use → Bank payment.

If the machinery physically exists and independent records establish its acquisition and use, those facts can be highly significant.

Example: Raw Material Purchase

Suppose a manufacturer allegedly purchased 500 tons of raw material.

Potential evidence may include:

• Weighbridge records
• Truck records
• Warehouse entries
• Production consumption
• Finished-product output
• Bank payment
• Supplier correspondence

Production data can sometimes provide objective evidence concerning whether the claimed material actually entered the business.

Services Require a Different Evidentiary Strategy

Service invoices can create particular difficulties because there may be no physical goods to inspect.

Suppose an invoice states:

“Business Consultancy — TRY 4,000,000.”

The investigation may reasonably ask:

What consultancy?

Who performed it?

When?

What was delivered?

Why did the company need it?

For genuine services, preserve:

• Engagement agreement
• Scope of work
• Emails
• Reports
• Presentations
• Meeting records
• Timesheets
• Technical files
• Software files
• Deliverables
• Project correspondence

A contract and invoice alone may provide a less complete evidentiary picture than contemporaneous proof of actual performance.

Risk for Foreign Directors Who Do Not Speak Turkish

Language is particularly relevant for multinational companies.

A foreign director may conduct business entirely in English while:

• Invoices are Turkish
• Tax declarations are Turkish
• Accounting is performed locally
• Supplier negotiations are handled by local staff

This does not create automatic immunity.

But it can be relevant to determining the director’s actual knowledge and involvement.

Preserve evidence showing:

• Corporate reporting lines
• Languages used internally
• Information supplied to the director
• Translation practices
• Accounting reports
• Management presentations
• Emails with local management

The defense should establish what the director actually received and understood rather than merely relying on nationality or language.

Is the Foreign Director Liable Because They Are an Authorized Signatory?

Not automatically.

Signature authority is relevant evidence, but the context matters.

A director may have signed:

• Supplier contract
• Purchase authorization
• Bank transfer
• Financial statements

The investigation should determine what the signature actually represented.

For example, signing a payment authorization after a procurement department certified delivery is different from personally creating a fictitious supplier arrangement.

Individual conduct must be examined.

Is a Foreign Shareholder Automatically Responsible?

No conclusion should be drawn merely from share ownership.

Consider:

Foreign Investor A — 80% shareholder, non-executive

Local Manager B — supplier selection and procurement

Finance Manager C — payments

Accountant D — accounting and tax declarations

If a disputed invoice appears, the investigation should determine the role of each person.

Ownership alone does not answer who caused the invoice to be used.

Criminal Responsibility Should Be Individualized

Corporate investigations can involve many people simultaneously.

A company may have:

• Five directors
• Several shareholders
• Procurement department
• Finance department
• External accountant
• General manager

The criminal case should not collapse these roles into:

“The company used the invoice, therefore all directors are responsible.”

The relevant acts and evidence concerning each suspect should be separately examined.

“The Accountant Did It” Is Not a Complete Defense

Foreign directors sometimes respond:

“I had an accountant. I knew nothing.”

That statement may be accurate in some cases, but by itself it does not resolve the investigation.

The file should establish:

Who found the supplier?

Who ordered the goods?

Who received the invoice?

Who approved it?

Who instructed payment?

Who delivered it to accounting?

What did the accountant actually do?

An accountant may simply have recorded documentation supplied by company management.

In another case, accounting personnel may have exercised substantial independent control.

The actual workflow matters.

Preserve the Corporate Responsibility Structure

Foreign directors should identify the company’s operational structure at the relevant time.

Preserve:

• Organizational charts
• Job descriptions
• Employment contracts
• Signature circulars
• Internal authorization policies
• Procurement procedures
• Board resolutions
• Bank mandates
• Approval limits
• Email instructions

This evidence can establish who was responsible for particular transactions.

Historical Corporate Records Can Be Crucial

A false invoice investigation may concern transactions several years old.

Management may have changed.

Employees may have left.

The foreign director may no longer work for the company.

Do not assume the current corporate structure reflects the historical structure.

Reconstruct the company as it existed when each disputed invoice was processed.

Foreign Director Appointed After the Invoice

This is particularly important.

Suppose:

March 2023 — disputed invoice issued

April 2023 — invoice entered into accounting

January 2025 — foreign investor purchases company

February 2025 — foreign director appointed

If the investigation begins in 2026, the foreign director’s current position should not obscure the chronology.

Document appointment and acquisition dates immediately.

Foreign Investor Who Acquired the Company Later

A foreign investor can acquire a Turkish company carrying historical tax risks.

The investor may later discover earlier:

• False invoice allegations
• VAT problems
• Tax inspections
• Undisclosed tax debts
• Supplier investigations

Criminal responsibility and contractual acquisition liability are different issues.

A share purchase agreement may allocate financial risk between buyer and seller, but contractual indemnification does not itself determine who committed a criminal offence.

Director Who Resigned Before the Transaction

The reverse situation is equally important.

If the disputed invoices were issued after a director’s resignation, preserve:

• Resignation letter
• Board resolution
• Trade registry records
• Termination of signature authority
• Bank authorization changes

Precise dates can substantially affect the investigation.

Supplier Due Diligence Can Become Relevant

The investigation may examine whether there were obvious warning signs.

Relevant questions include:

Did the supplier have a real business address?

Did it have employees?

Did it appear capable of supplying the goods?

Were market prices plausible?

How was the supplier found?

Was payment requested to an unrelated account?

However, due-diligence expectations should be assessed in the context of the transaction. The law does not turn every purchaser into a tax inspector responsible for discovering every hidden irregularity of a supplier.

Supplier Capacity Must Be Evaluated Realistically

A small supplier is not automatically fictitious.

Modern businesses can operate using:

• Subcontractors
• Third-party warehouses
• Direct shipping
• Outsourced manufacturing
• Logistics providers

Therefore, the absence of a large warehouse or many employees should not be examined in isolation.

The business model matters.

Bank Payments Are Important Evidence

Bank records can establish:

• Payment date
• Amount
• Recipient
• Payment description
• Corporate account used

But a bank transfer alone may not prove the commercial transaction was genuine.

Investigators may examine whether the supplier:

• Withdrew the money immediately
• Returned funds
• Transferred money to related persons
• Distributed funds among other accounts

The defense should therefore understand the wider payment chain where it becomes relevant.

Circular Payments Can Create Serious Questions

Suppose the company pays Supplier A TRY 10 million.

Two days later, TRY 9.5 million returns to a shareholder through another company.

That pattern may require a credible factual explanation.

Do not ignore unusual banking movements.

At the same time, suspicious financial movement should be analyzed rather than automatically equated with guilt.

Cash Transactions Can Be Harder to Prove

Where large invoices were allegedly paid in cash, the defense may need additional evidence.

Potential evidence includes:

• Company cash ledger
• Cash withdrawal
• Payment receipt
• Person delivering cash
• Person receiving cash
• Delivery records
• Supplier correspondence

Never create missing documentation after the investigation begins.

Do Not Backdate Documents

A false invoice investigation can become dramatically worse if someone attempts to manufacture a defense.

Do not:

• Backdate contracts
• Fabricate delivery notes
• Create fake emails
• Alter accounting records
• Manufacture warehouse entries
• Delete correspondence
• Pressure employees to provide false statements

Preserve genuine contemporaneous evidence.

Electronic Invoices Are Not Automatically Genuine Transactions

An electronic invoice may establish that a document was electronically generated and recorded.

It does not necessarily prove that the underlying goods or services existed.

The Revenue Administration’s current guidance focuses on substantive indicators such as actual commercial activity, movement of goods, inventory analysis, transportation and payments when determining false-document issues.

The underlying transaction remains central.

Customs Evidence Can Support Foreign-Owned Companies

Where disputed invoices relate to imported goods, independent customs evidence may be especially useful.

Preserve:

• Customs declaration
• Commercial invoice
• Packing list
• Bill of lading
• Air waybill
• Transport documents
• Warehouse entry
• Import payment

The documents should be checked for consistency rather than simply collected.

Transportation Evidence Can Be Decisive

If the invoice concerns physical goods, ask:

How did the goods move?

Relevant evidence may include:

• Truck registration
• Freight invoice
• Driver information
• Delivery records
• Weighbridge documents
• Warehouse entrance
• Logistics-company records

The Revenue Administration’s current 2026 guidance expressly identifies transportation, payment and inventory-related evidence among the factors used when determining whether an underlying transaction genuinely existed.

What If the Supplier Was Genuine at the Time but Later Became Suspicious?

Later events do not automatically establish what a purchaser knew earlier.

A supplier may subsequently:

• Close
• Become insolvent
• Stop filing tax returns
• Lose employees
• Become subject to investigation

The defense should focus on conditions existing when the disputed transaction occurred.

Contemporaneous evidence is especially valuable.

Tax Inspection and Criminal Investigation Are Different

A false-invoice case can have both tax and criminal dimensions.

Tax consequences can include assessments and penalties.

Separately, conduct falling within Article 359 can lead to criminal proceedings. Article 359’s current statutory framework treats specified false-document conduct as a tax-evasion offence.

The Constitutional Court has also addressed the interaction between tax penalties and criminal proceedings arising from overlapping conduct, recognizing that they are distinct proceedings while emphasizing procedural safeguards concerning potentially overlapping factual determinations.

Foreign directors should therefore coordinate the two defenses without assuming they are identical.

How Can the Matter Reach the Public Prosecutor?

Article 367 of the Tax Procedure Law regulates referral of findings concerning Article 359 offences.

The statutory framework provides for tax inspectors and other authorized officials, together with the relevant report-evaluation mechanism, to notify the public prosecutor when specified tax-evasion offences are identified during examination.

Therefore, by the time a foreign director learns of a criminal investigation, a substantial tax-inspection file may already exist.

Review the Tax Inspection File Carefully

A defense should identify how the conclusion was reached.

Ask:

• Which invoices are disputed?
• Which years?
• Which supplier?
• Why was the supplier considered problematic?
• Was the recipient company independently examined?
• Were bank records analyzed?
• Was delivery investigated?
• Were transport records obtained?
• Was supplier capacity examined?
• Was the director’s individual role identified?

A conclusion should be tested against the underlying evidence.

Turkey Uses Risk Analysis Against False Invoice Activity

False-document enforcement is increasingly data-driven.

The Revenue Administration’s technology infrastructure includes the False Document Risk Analysis Program, which analyzes VAT taxpayers using risk-scoring methods for potential false or misleading document activity.

This means a company may come under scrutiny through broader data analysis even before any individual director is personally suspected.

A risk indicator, however, should be distinguished from proof of individual criminal responsibility.

What Should a Foreign Director Do After Receiving a Tax Inspection Notice?

Do not wait until a prosecutor summons arrives.

Immediately determine:

Which period?

Which supplier?

Which invoices?

What amounts?

What transaction?

Who was responsible internally?

Then preserve the underlying evidence.

What If the Director Is Summoned by the Prosecutor?

Before giving a detailed statement, understand the allegation.

A director should ideally know:

• Relevant invoice numbers
• Supplier
• Tax period
• Amount
• Alleged false transaction
• Their alleged role
• Evidence relied upon

A generic denial can be less useful than an invoice-specific explanation supported by documents.

Prepare an Invoice-by-Invoice Defense

If 40 invoices are disputed, do not defend them collectively with:

“All transactions were genuine.”

Prepare a table.

Invoice	Transaction	Payment	Delivery/Service Evidence	Responsible Department
001	Raw materials	Bank	Freight + warehouse	Procurement
002	Software	Bank	Project files	IT
003	Machinery	Bank	Delivery + installation	Operations
004	Consultancy	Bank	Reports + emails	Management

Each invoice may have a different evidentiary history.

Identify the Real Decision-Maker

For each transaction determine:

Who requested the purchase?

Who chose the supplier?

Who negotiated price?

Who approved the order?

Who verified delivery?

Who approved payment?

Who delivered the invoice to accounting?

This can be particularly important in companies with foreign directors and local operational management.

What If an Employee Acted Without the Director’s Knowledge?

Preserve evidence of the employee’s:

• Position
• Authority
• Approval limit
• System access
• Procurement role
• Banking authority

Also preserve internal communications.

The defense should establish actual responsibility rather than simply blame an employee.

What If Several Directors Are Investigated?

Do not assume every director should provide the same explanation.

Each director may have had a different role.

One may manage sales.

Another may manage finance.

Another may be a non-executive foreign investor.

Their individual involvement should be documented separately.

False Invoice Investigations and Foreign Managers Living Abroad

A director who has returned abroad should not ignore Turkish proceedings.

First determine:

• Investigation status
• Whether a summons exists
• Relevant invoices
• Alleged role
• Procedural stage

Do not assume that living abroad causes the investigation to disappear.

The appropriate response depends on the individual file.

Corporate Documents Should Be Preserved Immediately

Relevant records can disappear through ordinary business processes.

Preserve:

• Emails
• Accounting exports
• Electronic invoices
• Contracts
• Purchase orders
• Bank statements
• Warehouse records
• Delivery documents
• Enterprise software records
• Internal approvals

Do not wait until years later when employees and records may no longer be available.

What About “Explanation Invitation” Procedures?

Tax procedure contains mechanisms under which certain preliminary findings can result in an invitation to provide an explanation, but the availability and consequences depend on the nature and amount of the suspected conduct and the statutory rules applicable to the relevant period.

Revenue Administration guidance confirms that specified preliminary findings concerning use of false or misleading documents can fall within special explanation procedures when the statutory thresholds and conditions are satisfied. Those thresholds are subject to annual adjustment, so the exact figure applicable to the relevant tax year should be verified rather than assumed from a prior year.

Foreign directors should therefore not ignore an explanation notice.

It can be an important procedural stage.

2026 Current Position on False Invoice Investigations

In 2026, Article 359 of the Tax Procedure Law remains central to criminal exposure concerning false documents. The statutory concept focuses on documents representing transactions or situations that did not actually exist.

Current Revenue Administration guidance emphasizes substantive investigation rather than relying merely on the invoice itself. Relevant considerations include genuine business activity, movement of goods, inventory or production analysis, transportation, payment and collection evidence, commercial relationships and other factual indicators.

Turkey’s tax administration also uses dedicated risk-analysis technology to identify potential false-document activity among VAT taxpayers.

For foreign company directors, this makes documentary preservation particularly important.

The defense should reconstruct:

Company structure → Supplier selection → Commercial need → Contract → Goods or services → Delivery → Payment → Accounting → Tax treatment → Director’s individual role.

20-Step Defense Checklist for Foreign Company Directors

1. Identify every disputed invoice.
2. Identify the relevant tax periods.
3. Identify each supplier.
4. Determine the precise allegation concerning each document.
5. Preserve contracts and purchase orders.
6. Preserve bank statements.
7. Preserve delivery records.
8. Preserve transportation evidence.
9. Preserve customs documents where relevant.
10. Preserve warehouse and inventory records.
11. Preserve service deliverables.
12. Preserve emails and messages.
13. Establish who selected each supplier.
14. Establish who approved each purchase.
15. Establish who approved payment.
16. Establish who controlled accounting and tax filings.
17. Reconstruct the historical corporate structure.
18. Review the tax inspection findings.
19. Do not alter, delete or manufacture evidence.
20. Coordinate the tax and criminal defense strategies from an early stage.

Frequently Asked Questions

1. Can a foreign company director be prosecuted in Turkey for false invoices?

Potentially, yes, where Turkish jurisdiction and the statutory elements of the alleged offence are established. Foreign nationality does not itself prevent prosecution.

2. Is a foreign director automatically responsible because the company used the invoice?

No. The director’s individual conduct, role and the evidence concerning the disputed transaction must be examined.

3. What legally qualifies as a false document?

Article 359 defines a false document by reference to a transaction or situation that did not actually exist but was documented as if it did.

4. What if the supplier later turns out to have issued false invoices?

That does not by itself determine the foreign purchaser’s individual criminal liability. The purchaser’s own transaction, commercial reality, knowledge and conduct should be examined.

5. How can a company prove that goods were genuinely purchased?

Contracts, transportation records, warehouse entries, bank payments, inventory movements, customs documents, production records and other independent evidence may collectively demonstrate the transaction. Current Revenue Administration guidance specifically considers matters such as goods movement, transportation and payment.

6. What if the foreign director did not speak Turkish and relied on local management?

That fact can be relevant to actual knowledge and involvement, but it does not create automatic immunity. Internal reporting lines, delegated authority and the information actually provided to the director should be documented.

7. What if I became a director after the disputed invoices?

Preserve appointment records and reconstruct the chronology. A person’s current directorship should not be confused with involvement in transactions predating their appointment.

8. Can there be both tax penalties and a criminal case?

Yes, potentially. Tax and criminal proceedings are legally distinct, although overlapping factual findings can be relevant. The Constitutional Court has addressed the safeguards required in this interaction.

9. Should the director immediately blame the accountant?

No. The actual transaction and decision-making chain should first be established objectively. Unsupported blame can conflict with documentary evidence and weaken the defense.

10. What should a foreign director do first after learning about an investigation?

Identify the invoices, suppliers and periods; preserve commercial and accounting evidence; reconstruct the director’s actual role; and assess the tax and criminal dimensions before providing detailed explanations that may later become evidence.

Legal Assistance for Foreign Company Directors Facing False Invoice Investigations in Turkey

A false invoice investigation can create significant risks for foreign directors, investors and executives operating Turkish companies.

The defense should not be limited to arguing that:

“The company has an invoice.”

The central issue is often whether the underlying transaction genuinely occurred and what the individual foreign director actually did or knew.

A comprehensive defense may require examination of supplier activity, contracts, bank transfers, transportation documents, warehouse movements, customs records, service deliverables, accounting systems, corporate authority structures and tax-inspection findings.

Fırat Fesih Kaya Law Office provides legal assistance to foreign company directors, investors, shareholders and executives facing false invoice, tax inspection and tax-related criminal investigations in Turkey.

Lawyer Fırat Fesih Kaya assists foreign clients with investigation strategy, analysis of disputed invoices, reconstruction of genuine commercial transactions, tax inspection files, prosecutor proceedings, corporate responsibility, supplier evidence and defense preparation under Turkish tax and criminal law.

Early preparation is particularly important because many false-invoice investigations concern transactions several years old. Commercial records, emails, bank evidence, delivery documentation and historical corporate authority records should therefore be identified and preserved promptly.

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

This publication is provided for general informational purposes and does not constitute legal advice. Criminal liability, tax exposure and available defenses depend on the applicable version of the legislation, relevant tax period, individual director’s conduct, underlying commercial transaction and evidence in each case.