Fiscal Neutrality under EU Pre-Accession Assistance: VAT Exemption and Refunds for Non-Resident Union Contractors in Türkiye

In this article, the author examines how the tax exemption and VAT refund regime under the EU Instrument for Pre-Accession Assistance (IPA) preserves the fiscal neutrality of EU-funded actions in Türkiye. The article argues that entitlement to tax relief for non-resident Union contractors derives not from residence, establishment or domestic taxpayer status, but from contractual integration into the Union financing framework. In this context, VAT refund functions as a corrective mechanism that safeguards treaty-based fiscal neutrality when ex ante exemption cannot be applied.