Tax Consultation for Foreigners in Turkey

Tekce Visa is an international legal consultancy company that offers comprehensive assistance regarding taxation in Turkey for foreigners. All services related to Turkish tax laws for foreigners are offered by our lawyers.

What Are the Tax Requirements for Foreigners Living in Turkey?

If a taxable event has taken place in Turkey, then foreigners must pay the tax, regardless of whether they are residents or non-residents. Foreigners must acquire a tax ID number for legal purposes. For example, they must pay property tax and, if any, rental income tax, even if they do not have a residence permit in Turkey.

If foreigners are from a country that is a party to the double taxation agreement, in Turkey, they can avoid paying tax by paying it in their nation. The double taxation agreement, i.e. tax treaty, protects from paying double taxes on the same income.

On the contrary, if the real estate is not within the borders of Türkiye, the taxable event is not considered to have occurred here. Consequently, there is no need to pay property taxes on the real estate. In other words, foreigners are exempt from paying taxes for properties located in their countries.

In addition, the tax duty is determined in accordance with the Turkish tax system for foreigners. That’s why taxes resulting from an event, property, or other comparable occurrences in their nations are not binding on Turkey.

For example, a nation collects taxes on behalf of the government on drawing accounts, but, on the other hand, Turkish law does not recognize this sort of tax. Then, regardless of whether foreigners have a residence permit or not in Turkey, there is no need to pay tax because it is assessed in accordance with local law.

What is the Rate of Income Tax in Turkey for Foreigners?

The income taxes are paid on a progressive scale of 15 to 40% based on income, which means the more you earn, the higher your income tax rate. Non-employment income (income obtained outside of wages) can be taxed at a slightly different rate.

Other tax situations for individuals in Turkey are personal income tax, social security contributions, unemployment insurance, dividends and interests tax, and inheritance and gift taxes.

What are the Business Tax Rates in Turkey for Foreigners?

Corporate income tax and value-added tax are the main taxes for companies in Turkey. The standard corporate income tax rate is 20%. The standard value-added tax (VAT) rate is 18%, but there are also reduced VAT rates of 1 and 8% that are valid for some deliveries and services in Turkey.

There are also extra or other taxation regulations according to the sector, such as special consumption taxes and digital services taxes.

Türkiye, on the other hand, has 18 free zones with a special tax regime and benefits that encourage development and trade. Businesses in these zones are excluded from paying income, corporation, real estate, stamp duty, and VAT taxes on logistics services provided to third parties.

What Turkish Tax Forms Do Foreigners Need to File?

Tax filing in Turkey for foreigners is not mandatory for all. You do not have to file a tax return if your income comes from an employer that deducts taxes. However, if you get income from a business or from self-employment, you probably have to file an individual tax return.

In addition, you must submit an annual tax return if you run your own business or earn money through self-employment.

What Are the Benefits of Working with a Tax Consultant in Turkey?

Basically, tax advisors or consultants help taxpayers manage their tax risks and offer guidance on how to lower their taxable income, boost their tax refunds and tax exemptions.

By conducting audits and resolving tax issues with relevant departments, they ensure that their clients do not pay more taxes than they should according to their income level, investments and other parameters.

How Can I Find a Reliable Tax Consulting Service in Turkey?

It is important that you conduct an extensive study and take into account the feedback from other customers who share their experiences with the process. When doing research, you should pay close attention to whether the companies you come across have an experienced team in this field and that this team consists of lawyers and experts.

Tekce Visa has such a professional team who has the expertise to deal with any concerns on taxation, tax planning, investment incentives, work permits, residency permits, and company formation. We offer a clear roadmap for tax planning for expats in Turkey.

You can always contact us for further information about tax residency in Turkey.