New Wage Tax Exemption Reporting Requirement Added to the Withholding Tax and Social Security Premium Return

The Turkish Revenue Administration has introduced amendments to the content of the Withholding Tax and Social Security Premium Return. Under the new regulation, information regarding employees working in qualified service centers who benefit from the income tax exemption must be reported in a separate notification table.

The amendment will apply starting from the October 2026 taxation period and will cover the relevant tax returns submitted on or after November 1, 2026.

Under the regulation, the following income tax exemption limits apply to the wages of employees working in qualified service centers who meet the conditions specified in the legislation:

• General Application: The portion of wages not exceeding three times the gross minimum wage is exempt from income tax.
• Special Application: For qualified service centers operating in industrial zones approved by the President and in the Istanbul Financial Center with a participant certificate, the exemption limit is five times the gross minimum wage.

Wage amounts exceeding these limits are subject to taxation under the general provisions.

To identify employees benefiting from the exemption and monitor the relevant information, a new reporting table has been added to the "Attachments" section of the Withholding Tax and Social Security Premium Return.

The table, titled "Notification Regarding the Wage Tax Exemption for Qualified Service Personnel Employed in Qualified Service Centers (Income Tax Law Article 23/20)", requires information to be reported under two categories.

Workplace Information

Employers must report the province and district where the workplace is located, the relevant tax office, the number of employees benefiting from the exemption, the Social Security Institution (SGK) workplace registration number, and the workplace address.

In addition, employers must report the identification details of employees benefiting from the exemption, their employment start dates, total gross wages, wage amounts covered by the exemption, taxable wage bases, and income tax withheld.

When calculating the taxable wage base, the applicable exemption limits and relevant deductions under the Income Tax Law must be taken into account.

The new regulation does not introduce a general wage tax exemption for all taxpayers submitting Withholding Tax and Social Security Premium Returns. The reporting obligation applies specifically to employers with employees benefiting from the exemption under Article 23/1-(20) of the Income Tax Law.

Therefore, employers concerned must identify eligible employees, ensure consistency between payroll records and the information reported in the tax return, and complete all newly introduced reporting fields accurately.

Furthermore, taxpayers submitting their returns through the e-Declaration system must use the latest version of the Declaration Preparation Program, available under the "Required Programs" menu of the Digital Tax Office.

You can access further details on this matter in the Amendment to the Withholding and Premium Service Declaration published by the Revenue Administration. (In Turkish)