Turkey Tax 2023

• The tax system in Turkey is progressive.
  In other words, the higher your income, the higher the rate at which you will pay tax.
• The 2023 individual tax rates vary from 15% - 40%.
  Up to TRY 70,000 - 15%
  Over TRY 70,000 up to 150,000 - 20%
  Over TRY 150,000 up to 550,000 - 27%
  Over TRY 550,000 up to 1,900,000 - 35%
  Over TRY 1,900,000 - 40%
• in 2023 the standard rate of Turkey corporate tax is 25%.

Income Tax for an Individual in Turkey

• An individual in Turkey is liable for tax on his income as an employee and on income as a self-employed person.
  In the case of an individual who answers the test of a "permanent resident", the tax will be calculated on his income earned in Turkey and overseas.
  A foreign resident who is employed in Turkey pays tax only on his income in Turkey.
• To be considered Turkish resident, residence of over 6 months in Turkey during any calendar tax year must be established.
• An employer is obligated to deduct, immediately, each month, the amount of tax and national insurance due from a salaried worker.
• A self-employed individual is obligated to make advance payments on income tax that will be offset on filing an annual report.
  In the case of a new business, the advance payments will be calculated according to the estimates of the owner of the business.
  The advance payments will be made 4 times in each year.
• The standard rate for payments in advance of income tax in Turkey is 15% of the net profit.
• Certain payments are deducted from taxable income as detailed below.
• Capital gains are usually added to the normal income.

Turkey individual income tax rates 2016 (employment income)

Turkey Corporate Tax

• The 2016 tax rate applicable to corporations in Turkey is 20%.
• Capital gains tax in a corporation is usually added to the regular income of the corporation.
• There is a participation exemption for dividend received from a non-resident company by a Turkish company, subject to terms.

Capital Gains in Turkey

Capital Gains (for an individual)

• The rate of standard tax is identical to the rate of normal income tax on the income of an individual - that is from 15% - 35%.
• A capital gain from the sale of Turkish securities, traded on the Turkish stock exchange, that were held by the vendor for at least 1 year before the date of sale, or sale of shares of resident companies held for at least 2 years is exempt from tax.

Turkey Capital Gains (for a corporation)

• The standard rate of tax for a corporation is 20%.
• On the sale of foreign participations by a resident international holding company if held for more than 2 years the capital gain is exempt from tax.
• Under certain terms sale of local participation shares is taxed at 25% of the general 20% rate.

Reporting Dates and Payment in Turkey

• An Individual - An individual whose income is only from a wage is not obligated to file an annual return.
  The employer deducts tax from the employee and transfers it to the Tax Authority every month.
  - A self-employed individual must make 4 advance payments, one every quarter.
  A temporary tax of 15% of the net profit must be paid on making each advance payment.
  - A self-employed individual must file a tax return by the end of the month of March in the year following the end of the tax year.

• A Limited Company A Limited Company - It is compulsory to submit the financial statements by April 30.
  The advance payments are paid for the quarter.
  - A delay in submitting the annual return beyond the date prescribed is liable to a fine.

Deduction of Tax at Source in Turkey

Turkey Social Security

• The employer's contribution is 20.5% of the salary (to the limit specified in law).
  The employee's contribution is 14% of the salary.
  Employers pay additional 2% to unemployment fund, employees pay additional 1%.
• Turkey has signed a Double Taxation Prevention Agreement for social security with a number of countries.

Other Tax deductions in Turkey

• Dividend - 15%.
• Interest - 10%.
• Royalties - 20%.
• Technical Fees -20%.