Income Tax in Turkey

Turkey has a tax system that is like to other European taxation systems.

But in contrast to other countries from Europe, Turkey has very competitive taxes. 

Foreign entrepreneurs should know the rates of taxes that could bring them a lot of business opportunities, if they choose Turkey to invest in.

The direct taxation system in Turkey includes income and corporate tax. A natural person must pay the income tax for his/her income and other earnings in Turkey and the corporate tax is owed by legal persons.  

The value of the income tax is calculated according to the income of natural persons that can consist in:

  • profits from different businesses, including agriculture
  • wages
  • services offered to other persons
  • rent of properties
  • capital investments

Residency, important for taxes

An important thing you should know about the income tax in Turkey is related to the residency of the person who will be taxed. A natural person who has his residence in Turkey must pay the income tax in this country for his income obtained anywhere in the world. Even if you are a foreign citizen and you live in Turkey more than half a year, you are considered to be a Turkish resident and you have to pay the income tax, as the other Turkish residents who live in this country all year long.

An exception is made for the foreigners who live in Turkey for six months or more and they work for a specific project or business or for other purposes (if you are interested in finding out more details, you may read the Income Tax Law). The foreigners mentioned in that law are not considered as Turkish residents and they don’t have to pay the income tax for all their incomes, no matter where they are obtained.

Another category of citizens who must pay the income tax calculated on their total income is the Turkish citizens who stay abroad and work for a governmental entity in Turkey or for a private company that has the headquarters in Turkey.

The citizens that are not considered residents in Turkey have to pay the income tax calculated on their income obtained in Turkey.  

The rates for income tax vary from 15% to 35% according to the value of your income because this tax applies progressively.

For more details about the income tax you have to pay, if you obtain any income in Turkey, you can contact us for advice.