TAX CONSULTATION IN TURKEY

Tax system in Turkey

Types of taxes

Tax issues in Turkey are handled by the Tax Administration – TRA. This is where issues regarding resident certificates, declarations, and liability for non-payment of taxes are resolved.

Income tax

The first and most important tax that everyone in Turkey will have to pay, both local residents and resident foreigners.

Here’s what the tax will be charged:

• salary;
• provision of professional services;
• rental of real estate, aircraft, yachts, etc.;
• dividends, interest, royalties;
• pension.

The rate of this tax is progressive – the higher the annual profit, the higher the tax. The tax starts at a minimum of 15% and goes up to 40%.

Capital gains tax in Turkey

If you have made a successful transaction, do not forget to pay tax on the profits from this transaction. For example, you sold a house – the capital gains tax will be from 15 to 40%. You must pay this tax within 15 days after you receive the income.

Customs duties

Since 2022, individuals in Turkey will be subject to a 30% duty on goods that cost over 150 euros and are imported from countries that are not members of the European Union.

What items are not subject to customs duties when entering Turkey?

• Unlimited money. But you need to remember that you can take them back without declaring or confirming them for only 5,000 US dollars. We advise you to declare any currency exceeding US$10,000 before commencing your travel.
• Things for sports. Limit of two units per person.
• Using the same principle as sports items, you can take one electronic item per person.
• You can take an unlimited number of decorations. The main thing is that their total cost does not exceed 15,000 US dollars.

Important! We recommend that you create your bank account in Turkey or in another international payment system in advance to avoid the attention of tax authorities and regulators.

Property taxation in Turkey for individuals and companies

Transport tax– if you own any type of transport, you are required to pay tax twice a year.

If you bought a new car from a dealer and do not have a work permit, you are also required to pay VAT.

What taxes do legal entities pay in Turkey?

All legal entities operating or registered in Turkey are required to pay taxes.

In 2022, in Turkey, the income tax for legal entities is 23%.

For exporters and importers, the VAT rate is 18%, but it can be reduced to 1% and 8% for certain types of services and goods. Types of companies such as insurance and banks do not have to pay VAT, instead, they pay a 5% tax on insurance and banking transactions.

Capital gains tax in Turkey for companies it is set at 23%.

For such groups of goods as alcoholic beverages, oil, gas products, transport, household appliances, etc., a special consumption tax SCT has been established. For example, in 2022 the SCT rate is set at 65% for alcoholic beverages and 80% for cigarettes.

A tax has also been established for the gambling niche. Its rate is set depending on the field of activity and varies from 5% to 10%

Types of taxes paid by individual entrepreneurs in Turkey

Individual entrepreneur in Turkey pays:

• VAT rate of which varies and can be set at 0%, 1%, 10% or 18%;
• income tax at a rate of 23% (in 2022).

The responsibilities of a tax lawyer at Prikhodko and Partners law office include:

• Tax consultations in Turkey;
• Calculation of taxes in Turkey;
• Preparation of tax documents in Turkey;
• The tax office in Turkey;
• Settlement of tax disputes in Turkey.