Turkey Tax Guide

Turkey

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.

Corporate Taxation

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.

Personal Taxation

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.

Emails:
Can Turker: canturker@turkerler.com.tr
Masum Tuker: mturker@turkerler.com.tr