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Tax Regime in Türkiye

There are many countries with a taxation system, which has various layers and
a complex structure. In this regard, tax regime in Türkiye is no exception. The first step is to have an
understanding on the fundamental concepts of the tax regime in Türkiye.

The taxes in practice in the Turkish tax system are mainly as follows,

  • Taxes on Income (Income and Corporate Tax),
  • Taxes on Expenditures (Value Added Tax, Special Consumption Tax, Banking and Insurance Transactions Tax, Special Communication Tax, Gambling Tax, Stamp Tax, Customs Duty, and Taxes Imposed by Municipal Revenue Law),
  • Wealth Taxes (Inheritance and Transfer Tax, Property Tax, Motor Vehicle Tax).

Fixed tax and progressive tax are applied to various incomes in Türkiye. At this point, it is better to emphasize two topics that concern individuals and organizations.

Income Elements

The earnings that can be collected from the natural persons in a calendar year under the following topics are described as income tax in Trukey.

  1. Commercial income,
  2. Agricultural income,
  3. Self-employment income,
  4. Compensation,
  5. Income from movable and immovable assets,
  6. Other income and earnings.

Other income and earnings usually refer to an incidental income. For example, it can be the income obtained from the National Lottery or in the way if a person without salary income earns an income from a non-continuous activity.

Income Tax Rates of Employees: For the income tax of employees, a progressive tax system has been determined according to the cumulative income obtained. These rates are applied as 15%, 20%, 27%, 35% and 40% to the earning brackets announced every year.

Corporate Tax Rate: As of 2023, the corporate tax rate is the fifth lowest among OECD countries. A temporary law set the corporate tax rate at 22% in 2019 and 2020, 25% in 2021 and 23% in 2022.

Finally, the corporate tax rate has been set at 25% starting from 2023, to be applied to 2023 earnings.

Tax and Declaration Calendar for Companies

TAXATION TYPE DECLARATION PERIOD OF THE TAX TAX PAYMENT DUE DATE ADDITIONAL NOTES
Corporate Tax Return It is declared until the end of April, in the following year Taxation fee shall be paid at the end of April The tax will be calculated as 25% of the profit for 2023.
Income Tax Return It is declared until the end of March, in the following year
  • First installment shall be paid at the end of March.
  • Second installment shall be paid at the end of July.
The tax calculated in the annual income tax return is calculated according to the cumulative percentile. The tax is calculated over the rates starting from 15% up to 40%.
Provisional Corporate Tax Return
Provisional Income Tax Return
Declared quarterly within a yearly period.
The Q4 Quarterly Tax Return will be no longer submitted as of 2022
  • Q1: May 17
  • Q2: August 17
  • Q3: November 17
  • Q4 part has been repealed.
  • Q1: May 17
  • Q2: August 17
  • Q3: November 17
  • Q4 part has been repealed.
  • Fees that are to be paid as Provisional Corporate Tax Return Fee will be taken offset on the annual Corporate Tax Return payable.
  • The tax will be calculated as 25% of the profit for 2023.
  • Fees that are to be paid as Provisional Income Tax Return Fee will be taken offset on the annual Income Tax Return payable.
  • Provisional Income Tax Return Fee is set as 15%.
MUHSGK 1003A - MUHSGK 1003B
(Withholding and Premium Service Declaration)
In cases where the Withholding and Premium Service Tax Return Decleration is conducted quarterly;
  • Q1: April 26
  • Q2: July 26
  • Q3: November 26
  • Q4: January 26, of the next following year
In cases where the Withholding and Premium Service Tax Return Decleration is conducted monthly;
  • It is declared with MUHSGK 1003A or 1003B until the evening of the 26th day of the following month for the relevant period. The taxpayers who meet the special conditions listed in the law can obtain a second password for MUHSGK 1003B and declare personnel wages in a separate declaration with MUHSGK 1003B until the evening of the 26th day.
Taxation fee shall be paid by the 26th of the month of declaration, by evening.
  • Legal entities with less than 10 SSI Registered EE have to declare Withholding Tax Return 4 times in a year (quarterly basis)
  • Legal entities with 10 or more SSI Registered EE have to declare MUHSGK 1003A or MUHSGK 1003B every month within a year.
VAT1 Return Declaration shall be made by the 28th of each month. Taxation fee shall be paid by the 28th of the month of declaration, by evening. VAT Return shall be declared on a monthly basis.
VAT2 Return Declaration shall be made by the 21th of each month. Taxation fee shall be paid by the 23th of the month of declaration, by evening. VAT Return shall be declared on a monthly basis.
Recycling Contribution Share Declaration GEKAP declaration will be declared quarterly, until the end of the following month. Taxation fee shall be paid by the end of following month. Declared quarterly.
Tourism Share Declaration For the related period, it is declared on the last day of the following month. Taxation fee shall be paid by the end of following month. It is declared and paid monthly by the corporate taxpayers on the last day of the following month. It is declared and paid by non-Corporate Taxpayers in three-month periods on the last day of the month following the relevant period.
Accommodation Tax Declaration shall be made by the 26th of each month. Taxation fee shall be paid by the 26th of the month of declaration, by evening.
  • The rate of accommodation tax is 2%.
  • Due monthly and must be reported to the relevant tax office by the twenty-sixth of the month following the taxation period.
  • The taxpayer of the accommodation tax is those who provide accommodation services in the specified facilities. Includes corporate tax and income taxpayers.
Stamp Tax Duty In case where there is an Agreement(rent contract etc.) that shall be liable to Stamp Tax Duty, the tax fee shall be paid by the 26rd of the following month. Taxation fee shall be paid by the 26th of the month of declaration, by evening. In cases of having a legal Agreement between the parties, declaration shall be conducted.
Social Security Declaration
(MUHSGK 1003A - MUHSGK 1003B)
For the EE registered into the SSI system, declarations shall be conducted by the 26th of each month. It is declared via MUHSGK 1003A or MUHSGK 1003B. Tax payments shall be conducted by the last work day of the related month of the declaration. Shall be declared monthly as long as the legal entity has employees on payroll.

Tax and Declaration Calendar for Liaison Offices

TAXATION TYPE DECLARATION PERIOD OF THE TAX TAX PAYMENT DUE DATE ADDITIONAL NOTES
MUHSGK 1003A - MUHSGK 1003B
(Withholding and Premium Service Declaration)
In cases where the Withholding and Premium Service Tax Return Decleration is conducted quarterly;
  • Q1: April 26
  • Q2: July 26
  • Q3: November 26
  • Q4: January 26, of the next following year
In cases where the Withholding and Premium Service Tax Return Decleration is conducted monthly;
  • It is declared with MUHSGK 1003A or 1003B until the evening of the 26th day of the following month for the relevant period. The taxpayers who meet the special conditions listed in the law can obtain a second password for MUHSGK 1003B and declare personnel wages in a separate declaration with MUHSGK 1003B until the evening of the 26th day.
Taxation fee shall be paid by the 26th of the month of declaration, by evening.
  • Legal entities with less than 10 SSI Registered EE have to declare Withholding Tax Return 4 times in a year (quarterly basis)
  • Legal entities with 10 or more SSI Registered EE have to declare MUHSGK 1003A or MUHSGK 1003B every month within a year.
Stamp Tax Duty In case where there is an Agreement (rent contract etc.) that shall be liable to Stamp Tax Duty, the tax fee shall be paid by the 26rd of the following month.

Liaison Offices, due to entity type cannot register for stamp tax duty responsibility. Therefore, if there is an agreement that is subject to stamp tax, the tax can be declared and paid by the other signatory party and the half of the tax can be reflected to the LO. Or, the relevant LO can apply to the tax authority the entity is registered to and declare the tax.
Taxation fee shall be paid by the 26th of the month of declaration, by the evening. In cases of having a legal Agreement between the parties, stamp duty shall be declared.
Social Security Declaration
(MUHSGK 1003A - MUHSGK 1003B)
For the EE registered into the SSI system, declarations shall be conducted by the 26th of each month. It is declared via MUHSGK 1003A or MUHSGK 1003B. Tax payments shall be conducted by the last work day of the related month of the declaration. Shall be declared monthly as long as the legal entity has employees on payroll.

Notification!

Contents provided in this article serve to informative purpose only. The article is confidential and property of CottGroup® and all of its affiliated legal entities. Quoting any of the contents without credit being given to the source is strictly prohibited. Regardless of having all the precautions and importance put in the preparation of this article, CottGroup® and its member companies cannot be held liable of the application or interpretation of the information provided. It is strictly advised to consult a professional for the application of the above-mentioned subject.

For each concrete situation, it is strongly advised to seek guidance from a professional advisor. If you are a customer of ours, please consult with your customer representative before taking any action related to the announcement. If you are not a customer, seek advice from an expert.

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