Table of Contents
- How is an expense receipt recorded in the books?
- Which expense account should you choose?
- Employee expense entries: three examples
- Legal basis
- Checklist before recording an expense receipt
- How does it work in Masraff?
- Frequently asked questions
- Which accounts are used to record an employee expense receipt in Turkey?
- Should an expense receipt go to account 770 or 760?
- How is an expense paid from a business advance settled?
- How is an undocumented expense recorded?
In Turkey, a parking receipt an employee brings back usually turns into a three-line accounting entry: expense, VAT and a payable to the employee. Set the rule up correctly once and it works the same way every month; skip it and the same receipt gets debated every month. This article shows how an expense receipt is recorded under Turkey's Uniform Chart of Accounts (Tekdüzen Hesap Planı), with account-coded examples: an expense the employee paid out of pocket, an expense paid from a business advance, and an item that cannot be deducted (KKEG). All amounts in the tables are examples.
How is an expense receipt recorded in the books?
An expense receipt is recorded by posting the net amount to a class-7 expense account, the VAT to 191 Deductible VAT, and the total as a credit to the employee's account. You could call it the "three-account rule":
| Account | What is posted | Parking receipt of 120 TL with 20% VAT (example) |
|---|---|---|
| Class-7 expense account (740, 760, 770 …) | Amount excluding VAT (tax base) | 100 TL debit |
| 191 Deductible VAT (İndirilecek KDV) | VAT shown separately on the receipt | 20 TL debit |
| 195 Business Advances (İş Avansları), or an employee account opened under 320 | Total owed to the employee or deducted from the advance | 120 TL credit |
The question that decides the credit account is who put up the money first. If the employee paid out of pocket, the company owes them, and in most Turkish companies that debt is tracked in a current account opened in the employee's name under 320. If the employee received a business advance beforehand, the expense is settled against 195 Business Advances.
Which expense account should you choose?
The expense account is chosen by the function of the unit that spent the money, not by the type of expense. Companies using option 7/A of the Turkish chart most often use three accounts:
| Unit that incurred the expense | Expense account | Example expense |
|---|---|---|
| Production, service, field operations | 740 Service Production Costs | Travel and hotel costs of a field technician |
| Sales, marketing, distribution | 760 Marketing, Sales and Distribution Expenses | Customer visit, trade fair materials |
| Management, finance, HR | 770 General Administrative Expenses | Head-office parking, stationery |
Companies using option 7/B post the same expense by nature to the 79x accounts. Which option applies and how sub-accounts are opened (for example 770.01 Travel Expenses) depends on the company's chart of accounts. What matters is that category and cost center are read together: the same meal receipt goes to 760 if it comes from the sales team and to 770 if it comes from head office.
Employee expense entries: three examples
Example 1: The employee paid out of pocket. An employee from the accounting department brought a parking receipt of 120 TL (100 TL + 20 TL VAT). When the expense is approved:
| Account | Debit | Credit |
|---|---|---|
| 770 General Administrative Expenses | 100 | |
| 191 Deductible VAT | 20 | |
| 320 Employee account (A. Yılmaz) | 120 |
When the reimbursement is paid, the employee account under 320 is debited and 102 Banks is credited (120 TL, example). Once the employee account is back to zero, the transaction is closed.
Example 2: An expense paid from a business advance. A sales representative received a 2,000 TL business advance for a trade fair (195 debit, 102 credit). The representative brought an invoice for fair materials of 1,440 TL (1,200 TL + 240 TL VAT) and returned the remaining 560 TL to the cash desk:
| Account | Debit | Credit |
|---|---|---|
| 760 Marketing, Sales and Distribution Expenses | 1,200 | |
| 191 Deductible VAT | 240 | |
| 100 Cash | 560 | |
| 195 Business Advances | 2,000 |
If the advance is larger than the expense, the difference is collected back; if it is smaller, the difference is paid to the employee and tracked in the employee account.
Example 3: A spend without a valid document. An employee brought only an information slip (bilgi fişi) for a 500 TL spend during a customer visit. An information slip is not a valid expense document, so no VAT is separated and the whole amount becomes a non-deductible expense (KKEG, Kanunen Kabul Edilmeyen Gider):
| Account | Debit | Credit |
|---|---|---|
| 689 Other Extraordinary Expenses and Losses (KKEG) | 500 | |
| 320 Employee account | 500 |
Some companies also track KKEG in memorandum accounts. Whichever route you choose, it should let you find the amount to add back to the corporate tax base at year end without digging.
Legal basis
In Turkey, recording an expense receipt rests on four laws. The table below shows which question rests on which article:
| Topic | Legal basis | In force since |
|---|---|---|
| Issuing and keeping documents such as invoices and receipts | Tax Procedure Law No. 213 (VUK), Art. 229–234 and 253 | 1 January 1961 |
| VAT is deductible only if shown separately on an invoice or similar document | VAT Law No. 3065, Art. 29 and 34 | 1 January 1985 |
| Deductible and non-deductible expenses | Corporate Tax Law No. 5520, Art. 8 and 11 | 21 June 2006 |
| The part of passenger car expenses above 70% cannot be deducted | Income Tax Law No. 193, Art. 40/5 | Limit in force since 1 January 2020 (Law No. 7194) |
Whether the VAT on a cash-register receipt can be deducted depends on the document type and the amount. For passenger car expenses, 30% of the amount becomes KKEG. Rates, thresholds and exceptions specific to your sector can change; confirm the setup with your financial advisor (mali müşavir) before you build it.
Checklist before recording an expense receipt
These seven questions keep a receipt from landing in the wrong account or bouncing back at month end:
- Is the document an invoice, an e-Archive invoice, a cash-register receipt or an information slip?
- Is VAT shown separately on the document, and is the rate correct?
- Which unit incurred the expense, and has a cost center been selected?
- Was the expense paid from an advance or out of the employee's pocket?
- Is part or all of the amount KKEG (passenger car, undocumented spend)?
- Does the document date fall in a closed period?
- Has the same document already been used in another expense?
How does it work in Masraff?
In Masraff, account determination follows the three-account rule above. For every expense receipt, the expense account, the VAT account and the employee account are determined separately:
- The expense account is found by table-based or detailed account determination, so the same category can land in different class-7 accounts for different cost centers.
- The VAT account comes from VAT account determination; the VAT on the receipt is separated into the 191 account.
- The employee account comes from the user's current account code settings; the reimbursement is posted to the 195 or 320 account.
- KKEG scenarios can be defined: 30% of vehicle expenses and the full amount of spends without a valid document are routed to KKEG accounts.
The expense report also runs the checks that come before the entry. The Expense Policy Engine applies limit and category rules while the expense is entered. When an expense is added to a report, the duplicate check prevents the same expense from being claimed twice, and period closing can block entries into a past period. With Advance Request & Settlement, a business advance is settled against the related expenses. For e-invoices, Expense Creation from Invoice QR takes the document data from the QR code. The prepared entries are transferred through integrations with more than 20 ERP and accounting systems. For details, see the Masraff expense management and account determination page.
For the receipt itself, its validity and retention period, read what an expense receipt is; for the tax effect of KKEG, read the KKEG accounting entry article.
Frequently asked questions
Which accounts are used to record an employee expense receipt in Turkey?
An employee expense receipt is usually recorded with three accounts: net amount to a class-7 expense account, VAT to 191, and the total to the employee account (195 or 320).
Should an expense receipt go to account 770 or 760?
If a management unit incurred the expense, it goes to 770 General Administrative Expenses; if the sales and marketing team did, it goes to 760 Marketing, Sales and Distribution Expenses.
How is an expense paid from a business advance settled?
An expense paid from a business advance is settled by debiting the expense and VAT accounts and crediting 195 Business Advances. Any surplus is collected back, and any shortfall is paid to the employee.
How is an undocumented expense recorded?
An undocumented expense, or one backed only by an information slip, is recorded in full as KKEG without separating VAT. In practice account 689 is usually used; agree your company's method with your financial advisor.