Inheritance and gift tax
The subject of this tax is Turkish citizens who have international assets.
Foreigners who have a permanent residency are liable to inheritance and gift tax on assets located in Turkey and assets and income received from Turkish citizens.
Foreigners who do not have permanent residency are liable to this tax on assets located in Turkey.
There is a progressive tax rate that varies from 10% to 30% and 1% to 10% on the items received as gift or inherited.
Property tax
Property tax is levied on buildings and lands in Turkey. Per annum, property tax is calculated at rates ranging from 0.1% to 0.3% by the said municipality. Within the metropolitan cities, these rates have increased by 100%.
Owner of the building/land is the taxpayer and has any usufruct right on the building/land or if neither of these exists anyone that uses the building/land is regarded as its owner.
Motor vehicle tax
The subjects of the tax are vehicles registered to traffic bureaus or offices such as land motors and also helicopters and airplanes registered to the Directorate General of Civil Aviation.
Taxpayers are civil and legal persons who own motor vehicles registered in their own names in the traffic register and civil aviation records kept by the Ministry of Transport, Maritime Affairs and Communications.
Every year, at the beginning of January, MVT is assessed and accrued. There are two equal installments in January and July each year.
There are three categories for motor vehicles that are taxable:
Other Taxes: Stamp Tax
(Law No. 488, Official Gazette No. 24783 dated 12.06.2012)
Stamp tax applies to a wide range of documents, including but not limited to, contracts,
agreements, notes payable, letters of credit and letters of guarantee, financial statements and payrolls. Stamp tax is levied according to the type of documents at different tax rates or lumpsum amount listed in Annex I of the Stamp Tax Law.
Gambling Tax
(Law No. 5602, Official Gazette No. 26469 dated 21.03.2007)
Betting, lotteries and other forms of gambling are subject to gambling tax. Taxpayers are organizers of gambling activities and proportional taxation is applied in this tax.
Customs Tax
(Law No. 4458, Official Gazette No. 23866 dated 04.11.1999)
Goods imported from abroad are subject to customs duty. Taxable events are free circulation
of goods, registration of customs declarations, and temporary importation in case of partial exemption.
Taxpayer is principally the person who declares to the customs office.
Customs duties are assessed on written declaration given by the taxpayer and are paid within 10 days from the date of notification.
Fees
(Law No. 492, Official Gazette No. 11756 dated 17.07.1964)
There are different types of fees: Judgment Fees, Notary Fees, Tax Judgment Fees, Title Deed Fees, Consulate Fees, Ship and Harbour Fees, Permit of License and Certificate Fees, Traffic Fees, Passport, Visa and Ministry of Foreign Affairs Certification Fees.
The above mentioned fees are collected on the basis of various rates or fixed amounts.
Turkish Taxation System
https://www.mevzuat.gov.tr/MevzuatMetin/1.5.488.pdf
Interactive Tax Office ( Interaktif Vergi Dairesi) website:
https://ivd.gib.gov.tr/ (NO LONGER ACTIVE)
UPDATE: 7 October 2023
THIS WEBSITE IS NOW CLOSED
YOU CAN NOW ACCESS THE TAX OFFICE WEBSITE AT:
Some of the services on the website that you have access to:
Rules relating to cash being brought into or taken out of Turkey
How much cash can I bring into Turkey?
There is no limit to the amount of foreign and Turkish currency to be brought into Turkey.
How much cash can I take out of Turkey?
More than US$5000 worth of Turkish currency can not be taken out of the country.
Up to US$5000 worth of foreign currency can be taken out of the country.
US$5000 in cash may be taken out of the country by foreigners living abroad, or Turkish citizens working abroad, and those settled in Turkey, if they document that they have purchased currency from authorised banks.
Larger amount of foreign or Turkish currency must be transferred abroad through banks.
Cash brought into the country and brought back out of Turkey must be declared on entry.
Double Tax Treaties in Turkey
To prevent double taxation, and in order to attract foreign investment, Turkey has concluded many treaties for the avoidance of double taxation with:
Albania, Algeria, Australia, Azerbaijan, Austria,
Bahrain, Bangladesh, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria,
Canada, China, Croatia, Czech Republic,
Denmark,
Egypt, Estonia, Ethiopia,
Finland, France,
Germany, Greece,
Hungary,
India, Indonesia, Iran, Israel, Italy,
Japan, Jordan,
Kazakhstan, Korea, Kuwait, Kyrgyzstan,
Latvia, Lebanon, Lithuania, Luxembourg,
Macedonia, Malaysia, Moldova, Mongolia, Montenegro, Morocco,
Netherlands, New Zealand, Northern Cyprus, Norway,
Oman,
Pakistan, Poland, Portugal,
Qatar,
Romania, Russia,
Saudi Arabia, Serbia, South Africa, Singapore, Slovakia, Slovenia, Spain, Sudan, Syria, Sweden,
Tajikistan, Thailand, Tunisia, Turkmenistan,
Ukraine, United Arab Emirates, United Kingdom, United States of America,
Uzbekistan and
Yemen.
Tax residency according to Turkey’s double tax treaties
One of the most important aspects covered by Turkey’s double tax agreements refers to the residence of the taxpayers.
According to the Turkish laws:
A local tax resident is considered a person who lives at least 183 days in a country, while in the case of company, tax residency is established on the country the business has its registered seat in.
Under the double tax treaties signed by Turkey, however, the following regulations apply in the case of individuals and companies:
For individuals having homes in two different states, the permanent residence will be deemed to be the one to which the persons have closer economic relations in;
For individuals whose place of residence cannot be determined as above, the tax residency will be established in the current country they live;
Nationality in another way of establishing a person’s tax residency, where none of the two criteria above apply;
Where none of the criteria above apply, the states singing the double tax treaties will have create mutual agreements;
In the case of companies, the permanent establishment status applies when it comes to determining the fiscal and tax residency of a business.
Is GST only paid by Foreigners?
GST is paid by all Turkish nationals and residents
Not having residency does not change the amount of KDV (or GST / VAT).
There is a waiver process involved for those that have not ever been deemed to have been residents in Turkey or having bought another property before.
The main test is not having lived in Turkey longer than 6 months in the last 12 months.
Digital Tax Office Launched
Digital Tax Office has now combined the services offered electronically by the Revenue Administration under a single roof at: digital.gib.gov.tr.
Access pages of the Interactive Tax Office (ivd.gib.gov.tr), Internet Tax Office (intvrg.gib.gov.tr) and e-Declaration System (ebeyanname.gib.gov.tr) are now closed.
https://dijital.gib.gov.tr/duyurular#0
TAX GUIDE
The Turkish tax legislation is classified under three main headings:
Income Taxes
The Turkish tax legislation includes two main income taxes, namely, personal income tax and corporate income tax.
1.1. Personal Income Tax
Real persons’ income is subject to personal income tax. Income is defined as the net amount of all earnings and revenues derived by an individual within a single calendar year. An individual’s income may consist of one or more of the following income elements:
– Agricultural profits
– Business profits
– Salaries and Wages
– Income from Independent Personal Services
– Income from Immovable property & rights (Rental income)
– Income from Movable Property (Capital Gains)
– Other Income and Earnings
The Turkish income tax scale is progressive, meaning that tax rates increase as one’s income grows. Individual income tax rates vary from 15% to 40%. Individual income tax rates applicable for 2023 are as follows:
Employment Income Tax Brackets:
Taxable Income (TRY) Lower End Tax Excess (%)
Lower End Upper End
0 70,000 – 15 %
70,000 150,000 10,500 20 %
150,000 550,000 26,500 27 %
550,000 1,900,000 134,500 35 %
1,900,000 – 607,000 40 %
Non-Employment Income Tax Brackets:
Taxable Income (TRY) Lower End Tax Excess (%)
Lower End Upper End
0 70,000 – 15 %
70,000 150,000 10,500 20 %
150,000 370,000 26,500 27 %
370,000 1,900,000 85,900 35 %
1,900,000 – 621,400 40 % > : 1.2. Corporate Income Taxes (CIT)
When the income elements specified in the Income Tax Law are derived by corporations, taxation is applied to the legal entities of these corporations.
Corporate taxpayers defined in the law are as follows:
– Capital Companies
– Cooperatives
– Public Economic Enterprises
– Economic Enterprises owned by Associates and Foundations
– Joint Ventures
The corporate tax rate in Türkiye for general business income in 2023 is set at 25%.
For banks and financial institutions such as electronic payment and money institutions, authorized foreign exchange institutions, asset management companies, capital market institutions, insurance and reassurance companies, and pension companies, the tax rate is set at 30%.
Exporters will benefit from a reduced corporate tax rate of 5% for their export income.
Taxes on Expenditure
2.1. Value Added Tax (VAT)
The generally applied VAT rates are set at 1%, 10%, and 20% as of July 2023. Commercial, industrial, agricultural, and independent professional goods and services, goods and services imported into the country, and deliveries of goods and services as a result of other activities are all subject to VAT.
2.2. Special Consumption Tax (SCT)
Four main product groups are subject to SCT at different tax rates:
– Petroleum products, natural gas, lubricating oil, solvents, and derivatives of solvents
– Automobiles and other vehicles, motorcycles, planes, helicopters, yachts
– Tobacco and tobacco products, alcoholic beverages
– Luxury products
Unlike VAT, which is applied on each delivery, SCT is charged only once.
2.3. Banking and Insurance Transaction Tax
Banking and insurance company transactions remain exempt from VAT but are subject to a Banking and Insurance Transaction Tax. This tax is levied on the income earned by banks, such as loan interest.
The general rate is 10%, certain transactions, such as consumer loans, are taxed at 15% as of July 2023.
Interest generated on interbank deposits is taxed at a lower rate of 1%.
There is a 0.2% tax for the sales of foreign currency.
2.4. Stamp Duty
Stamp duty applies to a wide range of documents, including contracts, notes payable, capital contributions, letters of credit, letters of guarantee, financial statements, and payrolls.
Stamp duty is levied as a percentage of the value of the document at rates ranging from 0.189% to 0.948% or is collected as a fixed price (a pre-determined price) for some documents.
Taxes on Wealth
There are three kinds of taxes on wealth:
3.1 Property taxes
Property tax is levied on buildings, apartments, and land owned in Türkiye at a rate of 0.1% to 0.6%, while Contribution to the Conservation of Immovable Cultural Property is levied at a rate of 10% of this property tax.
3.2 Motor vehicle tax
Motor vehicle taxes are collected each year in fixed amounts that vary according to the age and engine capacity of the vehicles.
3.3 Inheritance and gift tax
Inheritance and gift taxes are levied at a rate of 1% to 30%.
Dealing with real estate can be overwhelming in the beginning. That’s why we at Meow Consultancy have prepared a series of articles for you about everything from Turkish banks and laws to citizenship and residence permits.
If the articles aren't quite answering your questions, we’re right by your side.
The Meow Consultancy © 2024
