Types of taxes in Turkey

It is noted that the Turkish people have extensive knowledge in the subject of taxes in Turkey, due to the interest of the Turkish government in collecting taxes If, if you want to invest in or settle in Turkey, you must be fully and sufficiently familiar with the tax law in Turkey and get accurate information and details on this subject.

The tax system in Turkey is similar to the tax system in the European Union, where the state deducts taxes at different rates in order to meet public expenditures at all levels, and these taxes and their rates are determined each year according to certain statistics.

Types of taxes in Turkey

Taxes in Turkey have three basic types, and each type has several sub-types:

  1. Income tax: it is subdivided from the individual income tax and the company income tax

  2. Individual income tax: This tax is calculated by determining the annual income of each individual by determining all his returns and earnings and calculating them during one year.

The following is a list of individual income items that are taxed in Turkey:

  • business profits

  • agricultural profits

  • Salary or monthly wage

  • Income for independent services 'unrestricted to a fixed salary'

  • Income from immovable property "rental real estate"

  • Income from movable property "financial investments"

  • Other Earnings and Returns

The tax rate ranges between 15% and 35%, Turkish citizens working in official offices and institutions or those who work in institutions and companies that are headquartered in Turkey but reside in foreign countries because of their businesses and projects, and foreigners permanently residing in Turkey, and residing in Turkey for more than 6 years months without interruption during the year to pay the full tax.

As for the persons residing outside Turkey, they must be taxed only on their profits and revenue in Turkey

Corporate income tax: It is a type of tax imposed on corporate profits that is calculated on the net income of the company obtained every 3 months and paid to the government. Taxpayers in Turkey for corporate income are calculated according to the following list:

  • companies

  • associations

  • public economic establishments

  • Economic establishments owned by institutions and associations

  • joint projects

  • Company tax is paid at 22%

  1. Expense tax: It includes several types of taxes that fall under it, which we will address below

Value Added Tax (KDV): This tax is paid as a percentage of the price of the product, goods or even services, and it is added to the original price of the product. There are three rates that are used according to the products, which are:

  • 1% is imposed on purchases of wheat and its derivatives, in addition to real estate with an area of ​​more than 150 square meters.

  • 8% is imposed on purchases of basic consumer products such as meat, milk, eggs, honey and others.

  • 18% is imposed on non-essential products such as furniture, electrical appliances, spices, etc.

And there are many cases in which the value-added tax is exempted: all Turkish exports, seaport and airport services, devices and equipment imported for the purpose of investment, delivery of goods carried out through diplomats, but it is required that reciprocity be dealt with, transit transport services Oil drilling activities, manufacturers within free zones

  • special consumption tax SCT:

There are 4 basic groups for products that are subject to special consumption tax with different tax rates and rates, and they are paid only once and the groups are:

  • Petroleum products "Petroleum derivatives, lubricating oils, solvents and their derivatives, natural gas"

  • Vehicles of all kinds: cars/motorcycles/planes/helicopters/yachts.

  • Tobacco products and alcoholic beverages

  • Entertainment Products

  • Banking and Insurance Transaction Tax:

This tax is calculated from the income earned from banks, and the maximum limit for insurance and banking tax is 5%. As for the interest tax on deposit transactions, it is 1%. The tax on foreign exchange transactions has been abolished in 2008 AD

  • Stamp tax:

Of the taxes imposed on transactions that include documents or written papers, and often this tax is a certain fee against a stamp affixed to the document.

This tax is applied to a large number of documents: such as contracts, payment papers, capital contributions during the establishment of a company, as well as financial and accounting data such as payroll and wages, as well as the intervention of some letters in stamp taxes such as letters of credit and guarantee and others.

The value of the stamp tax is calculated either at a fixed and fixed rate for some documents, or at a value between 0.189% and 0.948% (ie less than 1%).

  • Wealth and property taxes in Turkey: There are three types of wealth taxes in Turkey:

  • Real estate ownership taxes: It is the most important tax that must be taken into account for people who are thinking of investing in Turkey, and it is characterized by being equal in treatment between Turkish citizens and foreigners. These taxes are:

  • Annual real estate tax: all real estate located within a specific municipal area must pay an amount of money annually in return for all services carried out by this municipality to ensure a comfortable stay and to improve the area, and the rate of this tax is 0.1 and 0.6% of the value of the property in the Turkish real estate market.

  • Title deed tax: The value of this tax is 4% of the total value specified for the property in the sales contract, and it is imposed when buying or selling the property, i.e. at the moment of registration of the title deed at the Real Estate Registry Department in Turkey.

This tax is paid once, and its value is paid equally between the seller and the buyer at the moment of transfer of ownership, i.e. sale or purchase, and also even when the property is inherited for the benefit of its beneficiaries from the owner’s family.

-Real estate profit tax: It is paid when the property is sold before its ownership exceeds five years from the date of purchasing the property. In this case, a 20% tax must be paid from the net profit achieved by the property during this period, starting from the date of its purchase. Ownership of the property exceeded five years.

-Car taxes: car taxes relate to two important points, which are the age of the car and its engine capacity, and its value varies from year to year.

-Inheritance and endowment taxes: their rate ranges between 1% to 30%, depending on the value of the inherited funds. They are paid in the months of May and November of each year, within a period not exceeding 3 years.

Taxes in Turkey are one of the most important things that foreigners in Turkey, especially Arabs, should pay attention to, because if they are not paid on time, the taxpayer will be doubled, and if you are struggling to pay them, we can help you calculate them and pay them to you at the Tax Directorate.

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