3 Types Of General Taxes In Turkey

One of the most common questions we get asked as Kingsman Estates is how taxes in Turkey work. The foundation of taxes in Turkey is based on residency. If you are an individual you must be living in Turkey for over 6 months in a given year. If you are a company you must be registered in a Turkish city to be subject to paying taxes in Turkey.

If you are a resident in Turkey you will be subject to pay taxes from your global earnings. If you are not a resident yet earning income in Turkey you will be subject to paying taxes in Turkey. Taxes in Turkey is a complex issue and requires professional assistance by tax lawyers. This guide on taxes in Turkey is legal advice and designed as a general introductory guide.

Taxes in Turkey are collected by the department of Income Management in Turkey.

If you are planning to move to Turkey or planning to buy a property in Turkey we most certainly advise all our clients as Kingsman Estates to be aware of certain taxes that you may or may not be subject to pay. We are pleased to be able to give tax advice on property taxes when our clients purchase property through us. However we recommend getting legal tax advice when it comes to our clients with complex income streams.

Types Of Taxes In Turkey

Taxes in Turkey can be classified under three main branches. These are income tax, taxes on expenditure and tax on wealth. This post is a general guide on how these work. If you are looking to find out detailed information regarding individual taxes please follow the links as they will take you to their individual page on our website.

Income Taxes 

Income taxes in Turkey have two types called personal income tax and corporate income tax.

Personal Income Taxes In Turkey 
Residency 

An individual’s residency plays a huge role regarding how taxes might or might not be imposed. 

  • If your residence is officially registered in Turkey 
  • If you live in Turkey for more than 6 months in a given year
  • If you work in Turkey
  • If the center of your economic interest resides in Turkey.

You will be recognised as a resident in Turkey. Residents of Turkey will be required to produce their entire global income to the tax office in Turkey and taxes you are required to pay will be calculated on that basis.

If you are a non resident of Turkey, you are only required to produce your income earned within Turkey and taxes you are required to pay will be calculated on that basis.

There are 7 different incomes that an individual will be subject to pay tax on. 

  • Agricultural Profits
  • Commercial Income
  • Employment Income
  • Self Employment Income
  • Income From Real Estate
  • Income From Movable Property
  • Other Types Of Income
Tax Rates

Tax rate that an individual is required to pay is calculated with a progressive basis. 

Employment Income Tax Rates
Up to 22.000 TRY%15
From 22.000 to 49.000 TRY%20
From 49.000 to 180.000 TRY%27
From 180.000 to 600.000 TRY%35
Over 600.000 TRY%40

Other Income Tax Rates

Up to 22.000 TRY%15
From 22.000 to 49.000 TRY%20
From 49.000 to 120.000 TRY%27
From 120.000 to 600.000 TRY%35
Over 600.000 TRY%40

Corporate Taxes In Turkey 

Corporate taxes in Turkey have a fixed rate of %20. This value is one of the most competitive rates among the OECD countries. Following companies are subject to paying corporate taxes in Turkey;

  1. Capital Companies
  2. Cooperatives
  3. Public Economic Enterprises
  4. Economic Enterprises Owned By Associations And Foundations
  5. Joint Ventures

Taxes On Expenditure 

Taxes on expenditure can be classified under four different categories in Turkey. 

Value Added Tax 

Value-added taxes in Turkey (KDV in Turkish) rates are arranged between 1% to 18% in Turkey and generally applied at 18%. VAT in Turkey is applicable to goods bought and produced in the country. There are some exemptions on VAT however it is beyond the scope of this post. 

Special Consumption Tax 

Special consumption tax is applied on various goods and they follow as,

  • Petroleum products
  • Cars, yachts, helicopters, planes and other vehicles
  • Tobacco
  • Alcohol
  • Luxury Goods
Banking And Insurance Transaction Tax 

Banking services in Turkey continue to be exempt from VAT however they are subject to banking and insurance transaction tax. This tax is generally applied on money earned from loan interests and they are generally at %5. 

Stamp Duty 

Stamp duty is applicable upon the production of legal and official documents such as contracts, letter of credit, financial statements, payrolls, notes payable. It is calculated from the value of the document and it ranges between 0.189% to 0.948%. Please be aware that some documents have a predetermined price. 

Taxes On Wealth

Wealth Taxes in Turkey can be classified under three main categories and they are property taxes, motor vehicle taxes and inheritance taxes. Real estate taxes range from 0.1% to 0.6%. Motor vehicle taxes are calculated according to the size of the engine as well its age. Inheritance taxes can range from 1% to 30%. 

Please do note that this guide is not tax or legal advice. Tax laws are constantly subject to change. This guide has been designed as a general guide regarding the taxes in Turkey. Individuals who wish to make financial transactions in Turkey may be subject to pay taxes in Turkey, so in order to avoid making mistakes please seek professional advice from tax lawyers or contact us to get up-to-date advice. 

Taxes are a complex subject and there are various categories of taxes individuals and companies are required to pay in Turkey. Corporate tax has a fixed rate of 20% and personal income taxes are calculated according to the progressive earnings of an individual. 

Some taxes on spending are higher when compared to other countries however corporate tax is incredibly competitive and fixed at 20%. 

The answer to this question is massively dependent on your place of residency and if you are earning income in Turkey. But generally if you are a foreign person and a resident of Turkey or earn income in Turkey, you will be subject to paying tax in Turkey.

Property taxes are paid yearly to your local council and they range from 0.1% to 0.6%. Please do not confuse the property tax in Turkey with capital appreciation tax in Turkey.

At the moment there are no taxes on tourists however there are talks and debates on tourists paying taxes in Turkey.

Yes! US citizens can retire in Turkey. Please contact us and our dedicated team at Kingsman Estates will help you through your retirement process in Turkey.

Stamp duty is paid upon the production of an official document in Turkey such as contracts, earning announcements and it ranges between 0.189% to 0.948%.

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