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Taxes for business in Turkey

Taxation in Turkey

Tax system in Turkey is based on an extensive legislative framework and is defined by the main taxation laws:

Tax Procedure Law No. 213.
Income Tax Law No. 193.
Corporate Tax Law No. 5520.
Value Added Tax Law No. 3065.
Special Consumer Tax Law No. 4760.

The tax system of Turkey is based on the declarative principle and implies regular timely submission of tax declarations to the relevant state authorities by both individuals and legal entities.

The main tax authority in Turkey is the Turkish Tax Committee affiliated with the Ministry of Finance. The Tax Committee accepts declarations from individuals and legal entities, charges penalties in case of late payment of taxes and duties, conducts tax audits and issues tax certificates to companies and individuals.

Taxes for business in Turkey

One of the key aspects of taxation in Turkey is corporate taxes. Corporate tax rate in Turkey is calculated depending on the nature of company's activity and the amount of its income. The usual corporate tax rate is 25% and it is set annually based on the economic environment by the president of Turkey.

The object of corporate income tax is the corporate income. The tax period is calculated on a calendar year basis (i.e. from January 1 to December 31 of each year). The annual tax return must be filed with the relevant tax authorities by the end of April - i.e. the 4th month after the reporting period. Paying taxes in Turkey is not an easy task: filing of tax returns is handled by a chartered accountant in Turkey – he must be a Turkish citizen and have the appropriate license. Therefore, accounting support in Turkey from TURK ADVISER implies the presence of both a chartered accountant and an accountant with knowledge of English.

Income tax for companies in Turkey can be charged basing on two principles:

  • Full tax liability, when all company incomes both received in Turkey and outside Turkey are declared and subject to taxation.
  • Partial tax liability, when only incomes received at the territory of Turkey are subject to declaration.

Corporate tax must be paid by organizations with the following forms of ownership:

  • Joint-stock companies.
  • Limited liability companies.
  • Economic state organizations.
  • Cooperatives.
  • Economic enterprises of public or charitable organizations.
  • Business partnerships.
  • Individual entrepreneurs.

As for freelancers, they must be registered as self-employed and pay taxes on a progressive scale (15-40%) depending on the amount of their income. They are also subject to full or partial tax liability.

VAT and export and import taxes

Turkey has a value added tax (VAT) system that is levied on goods and services. The tax rate for VAT may differ depending on the type of goods or services and may also be subject to changes depending on the region. The standard VAT rate for 2024 is 20%.

Taxes and tariffs applicable to the import and export of goods are regulated by Customs Law No. 4458.

Tax exemptions

Tax system in Turkey also includes various tax exemptions and incentives for various economic sectors, investments in certain regions, and the SME sector. These benefits and incentives may include tax exemptions or reduced rates for certain categories of taxpayers.

For example, companies registered in one of Turkey's 18 FEZs (free economic zones) do not pay income tax.

Preferential VAT is applied to companies engaged in the supply of agricultural products, as well as some other types of activities.

In addition, there are significant benefits in Turkey for IT-companies.

If you have a Turkish company – we invite you to TURK ADVISER for accounting services in Turkey! With us, you will not be afraid of any tax audits and will be able to develop and scale your business in Turkey!