By Av. Serkan Kara, Istanbul Bar No. 53770. Last updated: 14 June 2026.
Turkey taxes individuals and companies under a small set of named statutes: the Income Tax Law No. 193 (Gelir Vergisi Kanunu) for individuals, the Corporate Tax Law No. 5520 (Kurumlar Vergisi Kanunu) for companies, the Value Added Tax Law No. 3065 (KDV) on most goods and services, plus the Special Consumption Tax (OTV), stamp tax, property tax (Emlak Vergisi), motor vehicle tax (MTV), and inheritance and gift tax. The Revenue Administration (Gelir Idaresi Baskanligi) administers assessment and collection, and Turkey’s network of over eighty double taxation treaties governs how cross-border income is allocated. Because rates and brackets are reset by annual legislation and presidential decree, treat any figure below as indicative and confirm the rate in force on your filing date.
How is the Turkish tax system structured?
The system splits into direct and indirect taxes under separate codes. Direct taxes fall on income, profit, capital gains, and wealth: individual income tax under Law No. 193, corporate income tax under Law No. 5520, property tax, and inheritance and gift tax. Indirect taxes fall on consumption: value added tax (KDV) under Law No. 3065 and special consumption tax (OTV) on specific product categories. The Revenue Administration enforces all of them, and rates within each code are set progressively or by schedule rather than negotiated.
- Direct taxes: income tax, corporate tax, property tax, inheritance and gift tax, levied on earnings, gains, and assets.
- Indirect taxes: VAT (KDV) and special consumption tax (OTV), levied on consumption and built into the price of goods and services.
Who is a Turkish tax resident, and what does residency change?
Residency for individuals turns on the 183-day rule: spending 183 or more days in Turkey within a calendar year makes you a tax resident, which generally exposes your worldwide income to Turkish income tax under Law No. 193. Non-residents are taxed only on Turkey-source income. For companies, corporate tax residency under Law No. 5520 follows the place of legal seat or place of effective management; a company resident in Turkey is taxed on worldwide profit. Where two countries both claim you, the applicable double taxation treaty decides which state taxes which income and provides relief from being taxed twice.
What are the income tax rates and brackets for individuals?
Individual income tax under Law No. 193 is progressive: the rate rises through a series of income bands, so higher slices of income are taxed at higher rates. The bracket thresholds and the rate applied to each band are reset by legislation every year, and they move with inflation indexation. For that reason this guide does not quote a fixed bracket table; the brackets in force change annually and must be read from the current-year schedule published by the Revenue Administration before you compute liability.
Income tax reaches salaries and wages, pensions, rental income, self-employment and professional income, and certain capital gains. Employers apply withholding at source on employment income, and individuals file an annual return to declare other income, claim deductions, or recover overpaid tax.
- Deductions: items such as social security contributions and qualifying expenses may reduce taxable income, subject to the conditions and caps in the law for that year.
- Withholding: tax withheld at source by employers and certain payers is credited against the final assessment.
How is corporate income taxed in Turkey?
Companies are taxed on net profit under the Corporate Tax Law No. 5520 at a single headline rate. That headline rate is set by statute and has been adjusted repeatedly in recent years, including sector-specific surcharges for some taxpayers, so the rate applicable to a given financial year must be confirmed against the law in force for that year rather than assumed. Corporate taxpayers also pay advance (provisional) tax during the year, credited against the final annual liability.
Targeted reliefs can lower the effective burden in defined situations:
- Free zones: companies operating in designated free zones may qualify for corporate tax and other exemptions on activities carried out within the zone, on the terms set by the free zone legislation.
- Investment and R&D incentives: reduced rates, allowances, and exemptions may apply to qualifying investments, technology development zones, and research activity, each governed by its own incentive regime.
Foreign investors choosing a vehicle should weigh these reliefs alongside the broader setup decision. For a structured walkthrough, see our guidance on establishing companies in Turkey and on foreign direct investment.
How does VAT (KDV) work, including refunds for non-residents?
Value added tax (KDV) under Law No. 3065 applies to most supplies of goods and services at each stage of production and distribution, with the final consumer bearing the economic burden. The law sets a standard rate plus reduced rates for defined categories such as basic foodstuffs, certain medicines, and specified services; these rates are amended periodically by decree, so confirm the current standard and reduced rates before pricing or invoicing. Businesses generally offset input VAT against output VAT and remit the difference through periodic VAT returns.
Tourists and other qualifying non-resident buyers can reclaim VAT on eligible purchases under the tax-free shopping scheme: the seller issues a refund form, and the buyer validates it at customs on departure to recover the VAT, subject to the conditions in the regulation. For a deeper treatment of how KDV is calculated and reclaimed, read our explainer on what VAT (KDV) means in Turkey.
What other taxes apply: property, vehicle, capital gains, OTV, inheritance?
Beyond the three main codes, several further levies commonly affect investors and residents. Each is governed by its own rate schedule, so the amounts move over time:
- Property tax (Emlak Vergisi): an annual tax on real estate ownership, with the charge driven by the property’s location, type (residential versus commercial), and declared value.
- Capital gains: gains on assets such as real estate, shares, and bonds are taxed according to the asset type and holding period; some disposals benefit from exemptions or reliefs (for example certain holding-period or reinvestment conditions for real estate, and specific treatment for listed securities). The applicable rate and exemption conditions must be checked for the asset and year in question.
- Special consumption tax (OTV): a product-specific tax on categories such as tobacco, alcoholic beverages, motor vehicles, and fuels, often at high effective rates that vary sharply by category.
- Motor vehicle tax (MTV): an annual tax on registered vehicles, scaled by engine capacity, age, and vehicle type.
- Inheritance and gift tax: a progressive tax on inherited assets and large gifts, with higher rates on larger transfers.
- Stamp tax: a charge on a wide range of documents and contracts, calculated as a percentage of value or as a fixed amount depending on the document.
How do you get a Turkish tax number, and what documents are needed?
A tax identification number is the prerequisite for working, investing, opening a bank account, or doing business in Turkey, and it is issued by the local tax office (vergi dairesi) or, in many cases, through the Revenue Administration’s online channel. The core process is short and document-driven:
- Assemble the documents: passport (and residence permit where applicable) for individuals, plus company registration documents for legal entities.
- Apply to the tax office or online portal: submit the registration request to the relevant tax office or through the official electronic system.
- Complete the registration form: provide the requested identity and address details.
- Receive the tax number: the office issues the tax identification number on processing, which then ties to all subsequent filings and payments.
How are tax assessments disputed, and what are the deadlines?
A taxpayer who disagrees with an assessment can challenge it before the tax courts (vergi mahkemeleri), and the time limit is short: an action generally must be filed within 30 days of service of the assessment notice. Administrative settlement (uzlasma) and correction procedures may also be available before or instead of litigation, depending on the dispute. Because the limitation period runs from the date of notice and is strict, foreign investors should diary the deadline the moment an assessment arrives and seek advice immediately rather than near the deadline. Cross-border tax disputes frequently interact with treaty relief and may proceed alongside international commercial litigation where related commercial claims exist.
Litigation or administrative settlement for a tax dispute?
Most Turkish tax disputes can be pursued either through the courts or through administrative settlement, and the better route depends on the size of the assessment, the strength of the legal argument, and how much certainty and speed you need. The table compares the two on the factors investors usually weigh.
| Factor | Tax court litigation | Administrative settlement (uzlasma) |
|---|---|---|
| Trigger | Annulment action filed within 30 days of the assessment notice | Application to the settlement commission within the statutory window |
| Best when | The legal question is contestable and a precedent or full annulment is sought | The aim is to reduce penalties and interest quickly and gain certainty |
| Outcome | Binding court judgment, appealable through higher courts | Agreed reduction recorded in a settlement minute; closes the dispute |
| Speed and cost | Longer, with court timelines and appeals | Faster, with lower process cost |
| Trade-off | Higher upside if you win, more time and uncertainty | Concedes some liability in exchange for finality |
The choice is fact-specific; an early read of the assessment usually shows which route protects the most value.
How does Turkish tax interact with cross-border structures and treaties?
For foreign investors and cross-border groups, the decisive instruments are Turkey’s double taxation treaties, which override the domestic default by allocating taxing rights over dividends, interest, royalties, capital gains, and business profits between Turkey and the other state, and by capping certain withholding rates. Permanent establishment rules, transfer pricing, withholding obligations, and treaty relief procedures determine the real effective burden far more than the headline domestic rate. Because each treaty differs, the planning point is to read the specific treaty between Turkey and the investor’s home jurisdiction before structuring the flow of profit. Our note on international tax planning in Turkey sets out how this fits into a wider structure, and clients moving capital through Turkish banks should also review Turkish banking and finance law.
Frequently asked questions
Does spending 183 days in Turkey make me taxable on worldwide income?
Generally yes. Under the 183-day rule in the Income Tax Law No. 193, presence in Turkey for 183 or more days in a calendar year makes you a tax resident, and residents are taxed on worldwide income. Non-residents are taxed only on Turkey-source income. An applicable double taxation treaty can reallocate taxing rights and prevent the same income being taxed twice, so check the treaty with your home country.
What is the corporate tax rate in Turkey?
Corporate profit is taxed under the Corporate Tax Law No. 5520 at a single headline rate set by statute. That rate has been changed repeatedly in recent years and can carry sector-specific surcharges, so a single fixed figure is unreliable. Confirm the rate in force for the relevant financial year against the current law, and factor in advance tax and any free zone or investment incentives that apply to your activity.
How do I get a Turkish tax number as a foreigner?
Apply at the local tax office or through the Revenue Administration’s online system with your passport (and residence permit if you hold one); companies also submit registration documents. The number is issued on processing and is required before opening a bank account, buying property, or trading. The procedure is short, but the tax number then links to every later filing, so register it early in any investment plan.
Can non-residents reclaim Turkish VAT (KDV)?
Qualifying non-resident buyers can recover VAT on eligible purchases under the tax-free shopping scheme in the VAT Law No. 3065. The seller issues a refund form and the buyer validates it at customs on departure to obtain the refund, subject to the conditions in the regulation. Businesses recover input VAT differently, by offsetting it against output VAT through periodic VAT returns rather than at the border.
How long do I have to challenge a tax assessment?
An annulment action before the tax court generally must be filed within 30 days of service of the assessment notice, and the period is strict. Administrative settlement may also be available within its own statutory window. Because the clock starts on the notice date, foreign investors should record the deadline immediately and take advice early rather than close to the cut-off.
Talk to Serka Law about your Turkish tax position
Whether you are setting up a Turkish company, moving cross-border income, facing a VAT or capital gains question, or disputing an assessment, the rate that applies and the relief you can claim depend on the law in force and the treaty that covers you. Our team advises foreign investors and cross-border companies end to end. Speak to us through our tax law and customs regulations service, and contact Serka Law to review your specific situation.
General information, not legal advice. Turkish law; verify your specific situation with qualified counsel.
Related legal guides
- For related guidance, see our business and commercial law services.