Income tax

Income tax is charged on income of individuals: residents and non-residents of Turkey. If you are going to work in Turkey or hire employees to work in a company, then you will be interested in the information provided below.

The total income of an individual, subject to income tax in Turkey, the amount of the following types of income:

  • Profit from business activities
  • The profit obtained from farming
  • Wages
  • Income from independent personal services
  • Income from immovable property rental income
  • Income from investments
  • Other operating income and earnings excluding income sources

Fulfillment of tax obligations on payment of income tax for foreigners in Turkey

All foreign persons who are not citizens of Turkey, but living on the territory of Turkey, become responsible for paying taxes on their worldwide income. Any alien residing in Turkey for more than 6 months during a calendar year is equal to rights and obligations to pay taxes to Turkish citizens. However, non-residents of Turkey have the responsibility to pay the tax on the income only if they have been obtained from sources that are physically located in Turkey.

The basic rate of income tax from wages in Turkey is equal to 15%; it is progressive and reaches 35%. Individual income tax rates on other articles (not salaries) also vary between 15% and 35% on a progressive basis. However, the 35% rate on income tax from wages in Turkey was cancelled by the Constitutional Court of Turkey. New rates from 15% to 27% will enter into force 6 months after publication of the decree in the Official Gazette of the revocation.

With the year 2010 in Turkey following the size of income tax on gross annual income:

Profit amount in Turkish Liras

Rate (%)

Up to 8 800

15

8 801-22000

20

22 001-50000

27

50 001 and above

35

Salaries of employees are subject to taxation on income tax, and the employer is responsible for the calculation, withholding and payment of tax to the tax authority on behalf of the workers before the 20th day of the next month.

If the staff has less than 10 employees, the tax may be paid quarterly rather than monthly.

The basis for calculating the income tax constitutes a part of the Payroll after deduction of amounts not subject to income tax, which is part of the contribution of the workers to social security and unemployment insurance.

F o r m u l a: Base for calculating income tax = Payroll - social security payments (percentage of employees) - unemployment insurance payments (number of employees).

The above income is the income tax at the rate of 15% if the total amount of wage ranges from 0 to 8 700 TL. If you increase your salary, tax rate, increases gradually to 35%.

F o r m u l as income tax = base for calculating income tax* income tax rate (%).

 

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