Taxes in Turkey: The Ultimate Guide for Companies, Foreigners & Individuals

Turkey is quickly becoming one of the top options for citizenship by investment. Along with this come questions about taxes in Turkey and how they may apply to you.

In this guide, you will learn about:

• Who pays taxes in Turkey
• Personal tax rates in Turkey
• Corporate income tax in Turkey
• Capital gains rate in Turkey
• Turkey inheritance and gift taxes
• Consumption taxes in Turkey
• Turkey crypto taxes
• Turkey’s double taxation treaties
• How to file taxes in Turkey

Who pays Turkish taxes?

Turkey has a residency-based tax system. Essentially, this means that to be liable for tax on worldwide income you must be a tax resident of Turkey.

Citizens and residents of Turkey are not taxed based on immigration status, meaning that to be considered a tax resident, you must reside in Turkey for more than six months (183 days or more) in a calendar year. This is important to note if you apply for the Turkey Citizenship by Investment program.

The above comes into play whether you reside in Turkey continuously or intermittently, the total number of days should not exceed 183 in a calendar year.

If you remain in Turkey for less than six months in a year you can earn income from Turkey and still be a tax non-resident.

Companies (corporate taxpayers) may also be considered non-residents as long as the head office is registered in another country, even if there is income earned in Turkey.

Personal Tax Rates in Turkey

Individual income tax rates in Turkey are based on a progressive income tax system with rates ranging from 15% to 40%, depending on taxable income levels. The rates are structured as follows:

Individual income tax in Turkey 2024 can come from a range of sources, including:

• Agricultural profits: Profits from agricultural activities, including planting, hunting, fishing, cultivating, etc.
• Pensions: Disability, retirement, orphan pensions etc.
• Income from business: All industrial or commercial activities carried out in permanent establishments.
• Wages: Salaries and wages from an employer-employee relationship.
• Capital investment: Dividends, interest, rent etc.
• Independent personal services income: Income from freelance services.
• Immovable property: Income resulting from land, buildings, quarries and mines, machinery installations, copyrights, trademarks, and vehicles (aircrafts, ships etc.).
• Non-recurrent income: Earnings that don’t recur regularly, generally once off events.

Corporate Tax Rates in Turkey

Corporate income taxes in Turkey are currently set at 25%. This rate applies to most companies, however a higher rate of 30% applies to financial institutions such as banks and insurance companies.

Turkey also has 18 free zones, offering a special tax regime, including:

• No stamp duty
• No property or real estate taxes
• No VAT on logistics to third party countries
• No corporate or income tax

Here are the 18 free zones for corporate tax exemptions in Turkey:

Capital Gains Tax in Turkey

Capital gains for individuals

For non-residents of Turkey, capital gains tax only applies to assets within Turkey. Foreign investments generally do not fall under capital gains tax in Turkey.

Assets within Turkey that are sold and earn a profit are taxed, but it depends on how long the asset has been held and the type of asset. Here are some examples:

• Real estate: If you have owned a Turkish property for over five years, capital gains from the sale are exempt. If you sell the property within five years you are liable for the capital gains, which range from 15%-40%.
• Stocks and bonds: Short term holdings (under one year) are taxed based on the income bracket of the individual seller. Securities traded on the Istanbul Stock Exchange are exempt if they are held for over one year.

Inheritance Tax in Turkey

Turkey inheritance tax ranges between 1%-30%. Inheritance tax in Turkey depends on the degree of relationship between the heir and the deceased, as well as the value of the inheritance.

Turkish inheritance tax must be paid within three years of obtaining ownership of the inherited property. This is applicable to Turkish residents and non-residents that inherit Turkish property.

Here is how the progressive inheritance tax works:

• Lower value inheritances: 1%-10%
• Higher-value inheritances: 10%-30%

Consumption Taxes in Turkey (VAT)

The standard value-added tax (VAT) rate in Turkey is 20%. There are reduced VAT rates for certain products, including:

There is also a special consumption tax category for certain industries and products. This special consumption tax is collected once and is applicable to the following:

• Alcohol, sugar drinks, and tobacco products
• Petroleum-based products
• Vehicles (Land, sea, and air)
• Luxury products (phones, caviar, furs, household appliances etc.)

Turkey Crypto Taxes

Crypto is quickly becoming one of the most popular investment options across the globe. In fact, Turkey ranks as the 15th best nation for crypto attractiveness and adoption according to our Global Intelligence Unit report.

However, as of 2024, the Turkish Government does not have a specific taxation network for cryptocurrencies. That being said. Generally, crypto transactions in Turkey are seen as capital gains and may be subject to personal or corporate income tax depending on the nature of the transaction.

It is essential for those trading cryptocurrencies in Turkey to know which transaction types are taxed and how this may affect their personal income tax.

Double Tax Treaties in Turkey

Turkey has valid Double Tax Treaties (DTTs) with 85 countries, allowing individuals and companies to avoid double taxation on the same income.

There are 85 countries with double taxation treaties with Turkey, some include:

• Austria
• Canada
• France
• Germany
• Italy
• New Zealand
• Sweden
• The Netherlands
• United Kingdom
• United States

It is essential that foreign nationals know which Turkish taxes they are liable for. This includes how they can prevent paying double tax on the same products and services.

How to File Taxes in Turkey

Before you do anything regarding Turkish taxes as a foreign national it is best to speak with a Turkish tax specialist to ensure you are paying the correct taxes each year.

To file taxes in Turkey, individuals and businesses must follow these steps:

• Step one: Register with the Turkish tax office and obtain a tax identification number.
• Step two: Gather required documents: Relevant financial records, income statements, and deductions.
• Step three: Submit taxes online through Turkey’s Revenue Administration (GİB).

Becoming a Turkish Taxpayer: Pathway to Citizenship

The Turkey Citizenship by Investment program is a popular option for foreign nationals who want to live in Turkey. There are various investment options available:

1. Purchase real estate: Buy property in Turkey valued at a minimum of $400,000.
2. Fixed capital investment: Make an investment of at least $500,000 in a Turkish company.
3. Bank deposit: Deposit a minimum of $500,000 in a Turkish bank account.
4. Government bonds: Invest at least $500,000 in Turkish government bonds.
5. Investment in fund shares: Place a minimum of $500,000 in a real estate or venture capital investment fund.
6. Job creation: Create employment for at least 50 people in Turkey.

One of the main benefits of the Turkey Citizenship by Investment program is that you can obtain a Turkish passport in as little as four months.

Additionally, Turkey is a good option for those that want to live in Turkey part time with a holiday home without spending more than 183 days in the country to avoid taxation in Turkey for foreigners. Plus, with double taxation treaties with 85 countries, you won’t be taxed twice.

How Can Global Citizen Solutions Help You?

Global Citizen Solutions is a boutique migration consultancy firm with years of experience delivering bespoke residence and citizenship by investment solutions for international families. With offices worldwide and an experienced, hands-on team, we have helped hundreds of clients worldwide acquire citizenship, residence visas, or homes while diversifying their portfolios with robust investments. 

We guide you from start to finish, taking you beyond your citizenship or residency by investment application. 

 

Frequently Asked Questions about Taxes in Turkey

How much tax do you pay in Turkey?

Personal income tax is progressive, ranging from 15% to 40% depending on income. Tax laws state the tax in turkey for business is 25%, but there are 18 free economic zones offering special tax regimes. VAT in Turkey stands at 20%.

How do I pay tax in Turkey?

To file taxes in Turkey, individuals and businesses must follow these steps:

• Step one: Register with the Turkish tax office and obtain a tax identification number.
• Step two: Gather required documents: Relevant financial records, income statements, and deductions.
• Step three: Submit taxes online through Turkey’s Revenue Administration (GİB).

How much is VAT in Turkey?

The standard VAT rate in Turkey is 20%. There are some exceptions with VAT standing between 1% to 8% for items like agricultural products, meat, healthcare services, clothing, and educational services.

Are taxes low in Turkey?

Compared with many other western European countries, taxes in Turkey are generally quite low. For example, the top employment income tax rate in the UK is 45%, while Turkey stands at 40%. Italy comes in at 47%, while Portugal is 53%.

Does Turkey have wealth tax?

No, there are no national wealth taxes in Turkey.

Does Turkey tax on worldwide income?

No, Turkey does not tax on worldwide income for non-tax residents. You are only liable for earnings made within Turkey from a Turkish company or assets bought within Turkey. You may be taxed if you spend more than 183 days in Turkey and become a tax resident, but there are double tax treaties with 85 countries to ensure you don’t pay twice.

Is Turkey a tax haven country?

While Turkey does have some competitive tax rates it is not considered a tax haven in the traditional sense.

Does Turkey have property tax?

Yes, there are Turkey property taxes and its important to understand how it all works before you purchase a Turkish property. Property taxes in Turkey include VAT, stamp duties, annual property taxes, rental income tax, inheritance and gift tax, and a title deed fee.

Does Turkey have an income tax?

Yes, Turkey does have income taxes. Based on income tax law, residents or foreign nationals that earn money in Turkey are liable for income taxes which can range between 15%-40% depending on the income bracket.

Are there other tax residency options to consider?

Some don’t find the Turkey tax system very favorable. For those who want to acquire Turkish citizenship by investment can also consider other options for tax residency that can help optimize their tax situation. The countries which may be considered: Antigua and Barbuda, Malta, Cyprus, Greece, Italy.

Do foreigners pay taxes in Turkey?

Non-tax residents are not required to pay taxes in Turkey. Those that spend more than 183 days a year in the country is considered tax residents and are liable to pay tax on their worldwide income unless they fall under the double taxation treaty.