Verified Facts
The tax rates in Turkey range from 15% to 40% for personal income tax, with a corporate tax rate of 20% and a standard VAT rate of 18%.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Turkey has a territorial taxation system, where residents are taxed on their worldwide income, but non-residents are only taxed on their Turkish-sourced income. The residency rules for tax purposes in Turkey are based on the individual's physical presence in the country, with individuals considered resident if they spend more than 6 months in Turkey in a calendar year. Additionally, individuals who have a permanent home in Turkey are also considered resident, regardless of the amount of time spent in the country.
The Turkish tax system is complex, with various tax rates and exemptions applicable to different types of income. The tax year in Turkey runs from January to December, and taxpayers are required to file their tax returns by the end of March of the following year. The tax treaty network in Turkey is extensive, with treaties in place with 88 countries, which helps to prevent double taxation and facilitate international trade and investment.
Personal Income Tax
| Income Bracket (TRY) | Tax Rate |
|---|---|
| 0 - 18,000 | 15% |
| 18,001 - 40,000 | 20% |
| 40,001 - 98,000 | 27% |
| 98,001 - 600,000 | 35% |
| 600,001 and above | 40% |
| Taxpayers in Turkey are entitled to various deductions and allowances, including a personal allowance, mortgage interest relief, and charitable donations. Tax returns must be filed electronically, and the deadline for filing is the end of March of the following year. Taxpayers who fail to file their tax returns on time may be subject to penalties and interest on the outstanding tax amount. |
Corporate & Business Tax
- The corporate tax rate in Turkey is 20%, which applies to the taxable profits of companies.
- Small business incentives are available, including a reduced corporate tax rate of 10% for small and medium-sized enterprises (SMEs) that meet certain criteria.
- Free zones are available in Turkey, which offer various tax exemptions and incentives to companies that operate within these zones.
- Companies in Turkey are required to register with the tax authorities and obtain a tax identification number.
- Companies are also required to file their tax returns electronically, and the deadline for filing is the end of April of the following year.
VAT / Sales Tax
- The standard VAT rate in Turkey is 18%, which applies to most goods and services.
- Reduced VAT rates of 8% and 1% apply to certain goods and services, such as food, books, and pharmaceuticals.
- Certain goods and services are exempt from VAT, including healthcare services, education services, and financial services.
- A tourist refund scheme is available in Turkey, which allows foreign tourists to claim a refund of the VAT paid on certain goods and services.
For Expats & Foreign Workers
- Tax residency rules for expats and foreign workers in Turkey are based on the individual's physical presence in the country, with individuals considered resident if they spend more than 6 months in Turkey in a calendar year.
- Turkey has a double taxation treaty network with 88 countries, which helps to prevent double taxation and facilitate international trade and investment.
- Expats and foreign workers in Turkey are required to register with the tax authorities and obtain a tax identification number.
- Expats and foreign workers may be required to pay social security contributions in Turkey, depending on their employment status and nationality.
- Expats and foreign workers may be subject to remittance rules in Turkey, which regulate the transfer of funds out of the country.
- Expats and foreign workers may be eligible for a foreign earned income exemption in Turkey, which exempts a portion of their foreign-earned income from tax.
Crypto & Investment Income
- Investment income, including dividends, interest, and capital gains, is subject to tax in Turkey.
- Cryptocurrency is considered an asset in Turkey, and gains from the sale of cryptocurrency are subject to capital gains tax.
- Dividend income is subject to a withholding tax of 15% in Turkey, which can be reduced or exempt under a double taxation treaty.
- Interest income is subject to a withholding tax of 15% in Turkey, which can be reduced or exempt under a double taxation treaty.