The letter from the Istanbul Tax Office clarifies the procedure for income tax withholding on payments made to self-employed individuals such as artists and lawyers via an execution office through a bank, based on a court decision regarding a company’s debts. It explains that income tax withholding will not be applied on such payments, including legal fees, but the self-employed professionals must issue a “self-employment receipt” (serbest meslek makbuzu) for these payments, and these amounts should be declared in their income tax returns. The company must ensure the receipts are issued, and failure to do so will require reporting to the tax authorities, with penalties for non-compliance.
Source: Revenue Administration
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.
