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Turkey is one of the countries interested in collecting taxes, and whoever resides in Turkey must be fully and sufficiently familiar with tax issues in Turkey and know accurate information and details about this topic because of its importance if you want to reside, invest, own property or any other economic activities, it is good to be familiar with the tax laws in Turkey to know what you have and what you have to do
Are there additional taxes on foreigners in Turkey?
This is one of the rumors that you may hear from time to time, and the fact that any economic activity you have in any country (Turkey or elsewhere) will need to pay tax costs, and what is distinctive in Turkey is that there are no additional taxes on foreigners.
In Turkish law, as a foreigner, you can establish a company in Turkey, own a property or any other commercial activity, and only pay the regular taxes paid by the Turkish citizen if he performs the same activity.
In Turkey, foreigners may have to have some simple costs in exchange for translating some documents, or taking a translator, or the need for mediators and experts residing in Turkey, or the need to employ Turks within your institutions. and these matters are not classified as taxes in Turkey, but rather are needs that you have and differ according to your ability to carry out your duties on your own or according to the nature of your investment.
Tax rates in Turkey are competitive
On the other hand, taxes in Turkey are competitive with many European countries and countries of the first and second worlds, and at the level of the Organization for Economic Cooperation and Development (OECD), tax prices in Turkey are among the competitive prices that encourage investment in Turkey.
Turkey also has clear and transparent tax laws, which gives you comfort in legal procedures, more reassurance, and an increase in confidence and security. The majority of taxes in Turkey are logical, objective, and in line with international tax standards.
Taxes in Turkey receive from time to time laws and amendments that reduce the values of some taxes, either permanently or for limited periods as a kind of motivation.
Types of taxes in Turkey
Taxes in Turkey have three basic types, and each type has several sub-types, all of which will be talked about in the subsequent paragraphs of the article. The types of taxes in Turkey are:
Income Taxes
Expense taxes
Wealth and property taxes
Below are broader details about the types of taxes in Turkey.
Income Taxes in Turkey
When talking about income in Turkey, taxes here are divided into two main types:
personal income tax
corporate income tax
Income taxes in Turkey focus on two main points as well:
Income items and resources
net income
Individual income tax in Turkey
The amount of net earnings and returns that an individual receives during one year is determined.
The following is a list of individual income items that are taxed in Turkey:
business profits
agricultural profits
Salary or monthly wage
Independent Services Income
Income from immovable property "rental real estate"
Income from movable property "financial investments"
Other gains and returns
For Turks and those residing in Turkey for more than six months during the year, their income and the elements of income and earning inside and outside Turkey are calculated for the purpose of calculating individual taxes.
As for the residents outside Turkey who do not spend six months during the year inside the country, these sources of income that are located inside Turkey only are calculated.
Individual income tax calculation starts from 14800 TL
The value of the individual income tax in Turkey ranges between 15 and 35% of the income value.
The following is a table of tax rates in Turkey on individual income:
Income value | tax rate |
14800 TL | 15th% |
14801 - 34,000 Turkish liras 34001 - 120000 TL | 20% 27% |
More than 120000 TL | 35% |
Income tax for institutions and companies in Turkey
If the income is derived from companies or institutions in Turkey, taxes are imposed on the legal entities that represent the company, and taxpayers in Turkey for corporate income are calculated according to the following list:
Companies
associations
public economic establishments
Economic establishments owned by institutions and associations
joint projects
The income tax rate for companies with commercial profits ranges between 20 and 22%, but the Turkish government often adopts the lowest rate
The tax rate on the income of companies residing in Turkey is 15%, and it is paid when profits are distributed to the individual shareholders of the company.
As well as non-resident companies in Turkey are subject to an income tax of 15% and paid when transferring profits to the headquarters inside Turkey.
This tax is only applied to profits after distribution or transfer, and the capital is not included in the calculation of the tax value, but only profits.
Thus, we have completely finished talking about the income tax in Turkey, both individual and institutional, and we will move on to talking about
Expense taxes in Turkey
Value Added Tax (VAT):
The value-added tax in Turkey applies to goods and services of an independent commercial, industrial, agricultural and craftsman nature, goods and services imported from outside Turkey "imports", and the operations of delivering goods and services.
The value added tax in Turkey has three rates: either 1%, 8% or 18%
Value-added taxes in Turkey are distinguished by exemptions of several types, including:
Goods and services exported from Turkey "Exports"
Roaming services within Turkey that are provided to non-resident customers coming from outside Turkey, but on condition of reciprocity by the resident country, in accordance with international roaming agreements.
Manufacturers in free zones
oil drilling activities
Port and airport services provided to ships and aircraft
Imported machinery and equipment within the scope of the Investment Certificate
Transit
Deliveries of goods and services made by diplomats and representatives of foreign consulates, provided there is reciprocity, as well as for international organizations subject to tax exemption and their employees.
Insurance and banking transactions.
At the end of 2018, the Turkish government exempted Turkish and foreign real estate buyers who purchase real estate through bank transfer in a foreign currency and from outside Turkey. The exemption was for a temporary period of time that ended in March 2019, and the Turkish government may return to applying the exemption again for real estate or for others.
VAT applies to every delivery of goods and services
Special Consumption Tax SCT:
There are 4 basic groups for products that are subject to SCT with different tax rates and values, and the groups are:
Petroleum products "oil derivatives, lubricating oils, solvents and their derivatives, natural gas"
Vehicles of all kinds: cars/motorcycles/planes/helicopters/yachts.
Tobacco products and alcoholic beverages
Entertainment Products
Special consumption tax is payable only once.
Banking and Insurance Transaction Tax:
This tax applies to income earned from banks, especially interest on bank loans.
The upper limit for insurance and banking taxes is up to 5%
The interest tax on bank deposit transactions is 1%.
There is no tax in Turkey on foreign exchange transactions since 2008
stamp tax
Of the taxes imposed on transactions that include documents or written papers, and often this tax is a certain fee against a stamp affixed to the document.
This tax is applied to a large number of documents: such as contracts and payment papers, capital contributions during the establishment of a company, as well as financial and accounting data such as payroll and wages, as well as the intervention of some letters in stamp taxes such as letters of credit and guarantee and others.
The value of the stamp tax is calculated either at a fixed and determined rate for some documents, or at a value between 0.189% and 0.948% (i.e. less than 1%).
In this way, we have completed all the details of expenditure taxes in Turkey, and we have the last type of tax in Turkey to talk about in the next paragraph.
Wealth and property taxes in Turkey
There are three types of wealth taxes in Turkey:
Real estate property taxes
Car taxes
Inheritance and gift taxes
Here are some details about wealth and property tax rates in Turkey:
property type | tax rate |
Buildings, apartments and mortgages | 0.1 - 0.6% |
Protection of immovable cultural property "cultural buildings" | 10% |
Inheritance and gift taxes | 1 - 30% |
As for car taxes in Turkey, they relate to several points:
car age
Its engine capacity
The tax amount is determined differently each year.
So here we have finished all about the types of taxes in Turkey: income / expenditures / wealth.
Tax Incentives in Turkey
Since the beginning of 2012, Turkey has started implementing the tax incentives system to encourage foreign and Turkish investments. The distinctive feature of investment tax incentives in Turkey is that they apply to Turks and foreigners alike.
Turkey applies four different tax incentive systems:
world order
regional system
wide system
Strategic system
Fanar helps you pay taxes in Turkey
One of our new services in Fanar is that we help you in extracting the tax number, as well as in paying taxes in Turkey that you owe at a nominal cost, so that this is instead of you waiting for hours in the tax department.
Just inform one of our employees in our branches in Istanbul that you want to pay a tax in Turkey, and the employee will help you according to the type of tax, and finish the transaction in record time and without effort or time loss.
Taxes in Turkey are one of the things that foreigners ask about and inquire about in Turkey, especially Arabs, in order to know the full details that we mentioned in this article. We discussed the types of taxes in Turkey in an accurate and detailed manner. We also talked about tax incentives for investment, in order to be in this way aware of the issue in all its aspects.
