Revenue Administration
Istanbul Tax Office Presidency
Income and Corporate Taxes Group Directorate
Date: April 24, 2024
Number: E-62030549-120[65-2022]-530063
Subject: Medical services provided to healthcare institutions.
In your special request form registered in the correspondence, it is mentioned that, according to the contracts made between ….. and hospitals, as a partner and director of the company, you provide specialized medical services in accordance with the medical specialty legislation, and invoices are issued to healthcare providers by the limited company for these services. You have inquired whether, as a company partner, you should also establish a self-employment tax liability.
Article 6 of the Corporate Tax Law No. 5520 stipulates that corporate tax is calculated on the net corporate income obtained by taxpayers within an accounting period, and Article 2 states that the provisions of the Income Tax Law concerning commercial income are applicable in determining the net corporate income.
The Income Tax Law No. 193 includes the following provisions:
- Article 61, titled “Definition of Salary”: “Salary is the money and in-kind benefits provided in return for services rendered by employees who are under the employer’s control and are bound to a specific workplace.”
- Article 62, titled “Definition of Employer”: “Employers are natural and legal persons who hire employees and employ them within their orders and instructions.”
- Article 65, titled “Definition of Self-Employment Income”: “Income derived from any self-employment activity is considered self-employment income. Self-employment activity is the work performed on one’s own account and responsibility, based on personal effort, scientific or professional knowledge, or expertise, rather than capital, and is not of a commercial nature.”
- Article 66, titled “Self-Employment Practitioner”: “Those who perform self-employment activities regularly are considered self-employment practitioners. Engaging in other jobs or duties besides self-employment does not alter this status.”
According to Article 6 of Law No. 5510 on Social Insurance and General Health Insurance:
- Article 4, titled “Those Considered Insured”: “For the implementation of short-term and long-term insurance branches under this Law:
a) Those employed by one or more employers under a service contract,
b) Village and neighborhood muhtars and those who work independently on their own account and without a service contract:
- Those subject to income tax due to commercial or self-employment income,
- Those exempt from income tax but registered in the tradesmen and craftsman registry,
…
are considered insured.”
- Article 10, titled “Additional Article 10”: “… Doctors who are company partners or practice their profession independently, and those who are specialists according to the medical specialty legislation, are considered insured under the first paragraph (b) of Article 4 of this Law, if they provide services within healthcare institutions belonging to private legal entities and/or foundation universities, unless otherwise stated in their contracts. However, rights related to periods worked as insured under paragraph (a) of Article 4 prior to the publication of this article are preserved.”
Doctors who are company partners or practice independently and those who are specialists according to the medical specialty legislation are considered insured under paragraph (b) of Article 4 of Law No. 5510, and their earnings are subject to self-employment income provisions, unless otherwise stated in their contracts with private legal entities and/or foundation universities.
Accordingly, since the medical services you provide to healthcare institutions as the sole partner and director of … are rendered on behalf of the company and invoices are issued by the company, and there is no service contract between you and the hospitals, the earnings will not be considered self-employment income. The earnings from medical activities carried out within the company will be taxed as corporate income, and no self-employment income tax liability will be established in your name.
