Tax Law in Turkey

This article aims to provide a basic overview of Turkish tax system for all potential foreign investors.

The taxes in Turkish tax system can be classified under three main headings as follows:

1-) Income Tax (Income and Corporate Tax)

2-) Taxes on Expenditures (Value Added Tax, Special Consumption Tax, Banking and Insurance Transaction Tax, Special Communication Tax, Stamp Duty Tax, Tax on Customs),

3-) Taxes on Wealth (Inheritance Tax, Property Tax, Motor Vehicle Tax).

 

Income Tax

Especially foreign investors are wondering if there is an income tax in Turkey. In this article we have compiled the answer to the question “is there income tax in Turkey?“.

Income tax, as the name implies, is a type of tax levied on incomes by individuals or corporations within a calendar year.

According to the Turkish Income Tax Law, income tax is levied on individuals who reside in Turkey permanently or for at least 6 months in a calendar year or live abroad on behalf of a private company or public institution headquartered in Turkey. All of the earnings and revenues from both Turkey and overseas of resident taxpayers are subject to tax in Turkey.

On the other hand, real and legal persons who are not resident in Turkey (called limited taxpayers or non-resident taxpayers) are taxed only on their earnings and revenues from Turkey. Their earnings and income from overseas are not subject to tax in Turkey.

In some cases, even if real persons have been in Turkey for more than 6 months, they are not be considered as resided in Turkey :

1- Businessmen, scientistis, specialists, civil servants, press and broadcast reporters and those who come to Turkey for a certain or temporary duty or job for the purpose of education, medical treatment, rest or travel.

2- Those who are compelled to stay in Turkey for reasons beyond their control, such as detention, conviction or illness.

For more information about income tax law Turkey, you can visit the following page: https://www.invest.gov.tr/en/investmentguide/pages/tax-guide.aspx

Turkish Taxation System

The decrease in the corporate tax rate in Turkey from 30% to 20% in recent years has made Turkey an attractive destination for foreign investors. Foreigners from some countries with which Turkey has signed double taxation agreements have other important advantages as they enjoy the double tax avoidance advantage.

On the other hand, Turkish government offers tax deductions and exemptions in many ways to attract foreign investors to Turkey. Therefore, foreign investors can easily establish a company in Turkey and operate more efficiently and profitably.

If you are interested in doing business in Turkey, Serka Law Firm is at your service with its expert lawyers.

For more information about investment incentives in Turkey, you can visit the following page : https://www.invest.gov.tr/en/investmentguide/pages/incentives-guide.aspx