Currency: Turkish Lira
Foreign Exchange Control: No restrictions however documentation of export of capital must be completed.
Accounting Principles: Uniform Chart of Accounts (UCA). Public companies must comply with accounting/reporting principles of the board which are generally in line with IFRS.
Business Entities: Principally, corporation, limited liability company, ordinary partnership, limited partnership, sole proprietorship and branch of a foreign company.
Residence: If legal seat or place of management in Turkey.
Basis: Residents with unlimited liability are taxed on worldwide income. Non-residents are taxed on Turkish-source income.
Rate: 20% with reduced rate for income from certain investments
Foreign Tax: Foreign tax credited against Turkish tax limited to the amount of Turkish tax payable.
Other: Allowances for R&D. Tax exemptions for manufacturing activities. Reduced tax on income from investments in specified regions/cities and sectors.
Tax Year: Calendar year or fiscal year. Can gain permission from the Ministry of Finance to use a special accounting period.
Residence: Residents taxed on worldwide income, non-residents taxed on Turkish-source income only (resident if in Turkey for > 6 months in a calendar year with exceptions for specific business, health care, holidays etc).
Rate: Progressive up to 35%
Capital Gains: Some gains subject to income tax
Other: Stamp duty: 0.189% – 0.948% depending on document.
Real property: Levied based on value of land or building.
Inheritance tax: gift tax of 10% – 30%, inheritance tax of 1% – 10%
Social Security: Employees 14%, employers 19.5%-25%
VAT: Standard rate 18%
Member Firm: Turkeler Auditing & Tax Consulting Inc.