Non-resident taxpayers do not submit annual returns for their incomes from immovable property which are taxed wholly by the withholding in Türkiye. Also, in case they submit the annual return for other incomes, they do not include their incomes which are subject to the withholding in their returns.

Taxpayers whose income subject to declaration consists only of the rental income will submit the annual tax return, if;

• Those whose housing rental income obtained in a calendar year exceeds the exemption amount of 9,500 TL for 2022 (21,000 TL for 2023),
• Those who obtain rental income not taxed by withholding tax as a result of renting goods and rights within a calendar year. On other saying, rental incomes that are not subject to the withholding and the exception must be declared the annual tax return regardless of the amount.

Every member of a family has to submit a return on their own behalf for the rental income they obtained from the property and rights belonging to them.

On the occasion that minor and restricted persons are taxpayers; the annual return to be submitted on behalf of them is signed by their parents, guardians or curators. In case of having property and rights with shares, every partner need to declare the rental income corresponding to his/her own shares.

DEDUCTIONS TO BE MADE FROM INCOME INCLUDED IN ANNUAL TAX DECLARATION

Deductions with respect to income to be declared by an annual tax return are specified in Income Tax Law and in other relevant laws. In order to make the following deductions from the income to be declared in income tax return while income tax base is being determined, there must be an income to be declared in an annual tax return and deductions to be made should satisfy the requirements specified in the relevant legislation.

The revenue that is declared at the annual tax return before the other deductions and the revenue loss of former years are deducted would be taken as the base revenue to calculate the amount that would be deducted.

Accordingly, here are some of the matter that may be made subject to the discount:

10.1. Life / Individual Insurance Premiums

The 15% of life / individual insurance premiums paid, can be deducted for determining the tax base in the annual tax returns.
The premiums that should be taken into account for determining the tax base are as follows:

• 50% of life insurance payments of the taxpayers’, their spouses and children,
• 100% of death, accident, health, disability, maternity, child birth and education individual insurance premiums.

The total amount that would be deducted cannot exceed the 15% of total revenue and annual amount of minimum wage. (The gross annual minimum wage for 2022 is 68.850,00 TL.)*

The premiums paid to the individual retirement insurance cannot be deducted.

*The gross minimum wage amount for 2022 was calculated in line with the Minimum Wage Determination Commission Decisions, which were determined as: 166.80 TL per day between 1/1/2022-30/6/2022 and TL 215.70 TL per day between 1/7/2022-31/12/2022.

10.2. Education and Health Care Expenses

The education and health care expenses done as stated below would be deducted from the annual revenue declared in tax return in condition not to exceed the 10% of total revenue:
• The education and health care expenses should be performed in Türkiye.
• The expenses should be verified by the documents received from the individual or legal personalities who are personal or corporate income taxpayers.
• The expenses should be regarding the taxpayers’ oneself or their spouse and small children.

The term” small child” refers to children under the age of 18 or under the age of 25 in the education who live with a taxpayer or who are cared for by a taxpayer (including those who are given alimony, those who have been adopted and those who live with a taxpayer from grandchildren who have lost their parents).

10.3. Donations and Aids
10.3.1. Donations and Aids Which Can Be Deducted As Limited to 5% of Income to be Declared

Personal income taxpayers, general and private budgeted public administrations, provincial administrations, municipalities, villages and non-profit associations and the foundations that are exempted from tax by President of the Republic, can deduct the donations and aids against receipt from their annual income in condition that it would not exceed the 5% of total income. (It would not exceed 10% of total income if donations are made to the stated organizations, associations and foundations in the development priority zone.)

10.3.2. Donations and Aids Which Are Completely Deductible

a) The donated schools, health institutions, the student dormitories and day care centers which have bed capacity not less than 100 (in development priority zones not less than 50), orphanages, rest houses, care and rehabilitation centers to the general and private budgeted public administrations, provincial administrations, municipalities, villages and all expenses for the construction of the place of worship constructed by the permission of authorized public administration and director, the institutions where there ligious education is given under inspection of the Directorate of Religious Affairs, youth centers and youth and scouting camps belong to the Ministry of Youth and Sports or all donations and aids in kind or in cash made for the construction or for the maintenance of their activities of these establishments can be deducted.

b) The total cost of food, cleaning supplies, clothing and heating donated to the foundations and associations established as food banks for helping poor people in line with the procedures an principles determined by the Ministry of Treasury and Finance can be deducted from the income to be declared.

c) General and private budgeted public administrations, provincial administrations, municipalities, villages, non-profit associations, the foundations that are exempted from tax by President of the Republic, the expenses done by institutions which makes scientific research or the expenses for the studies that are supported by the Ministry of Culture and Tourism and all donations and aids made for these purposes can be deducted.

d) The total amount of the donations and aids in kind or in cash against receipt to the aid campaigns initiated by President of the Republic.
e) The total amount of the donations and aids in cash against receipt to Turkish Association of Crescent and Turkish Green Crescent Society except their commercial enterprises can be deducted.

10.4. Sponsorship Expenses

According to Article 89/8 of the Income Tax Law the sponsorship expenses done can be deducted from the income declared at annual tax return as follows:
• 100% of expenses for amateur sports,
• 50% of expenses for professional sports.

10.5. Donations and Aids Which Are Completely Deductible in Accordance with Other Laws

Donations and aids which are completely deductible in accordance with other laws are as follows:
• Donations made in accordance with the Law No. 222 on Primary Education and Training,
• Donations made according to the Law No. 278 on the Establishment of the Scientific and Technical Research Council of Turkey,
• Donations made according to the Higher Education Law No. 2547,
• Donations made according to the Social Services Law No. 2828,
• Donations and aids made according to the Law No. 2876 on Atatürk Culture, Language and History Institution,
• Donations and aids according to the Law No. 3294 on Encouraging Social Assistance and Solidarity,
• Donations and aids made in accordance with the Law No. 3388 on the Turkish Armed Forces Foundation,
• Donations made according to the Anti-Terrorism Law No. 3713,
• Afforestation, maintenance and protection costs in forests established according to the National Afforestation and Erosion Control Mobilization Law No. 4122,
• Donations and aids made in accordance with the Republic of Turkey Pension Fund Law No. 5434,
• Donations, aids and sponsorship expenditures made in accordance with the Law No. 6546 on the Establishment of Çanakkale Wars Gallipoli Historic Site Presidency,
• Donations and aids made in accordance with the Law No. 6569 on the Establishment of the Presidency of Turkish Health Institutes and Amendments to Certain Laws and Decree Laws,
• Donations, aids and sponsorship expenditures according to the Law No. 7174 on Cappadocia Area,
• Donations and aids made in accordance with the Law No. 7269 on Measures to be Taken and Aids to be Made in Case of Disasters Affecting Public Life.

In case the donations and aids are not in cash, the equal value of the donated property or the right; if the equal value is not exist then the value determined by the Assessment Committee according to provisions of the Tax Procedure Law shall be taken into account.

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.

VAT collected on the building & construction expenses made for Strategic Investments will be rebated provided that the fixed investment amount is over 500 million TL in Turkey.

VAT Refund Example

Supposing that an investment with a total investment amount of 500,000,000 TL supported within the scope of the Strategic Investment Incentive Scheme allocates 20% of the total amount to building/construction expenses, the total building/construction expenses would be 100,000,000 TL.

VAT Refund Amount      = (Building/Construction Expenses) x (VAT Rate for Building/Construction Expenses)

= 100,000,000 TL x 0,18

= 18,000,000 TL

* The VAT rate applicable to building/construction expenses is 18%.

VAT Exemption

Investment machinery and equipment imported and/or locally provided within the scope of the incentive certificate will be VAT exempt.

VAT Exemption Example

If the project is VAT exempt, an investor purchasing local machinery and equipment worth of 10,000,000 TL or imported machinery and equipment worth of 20,000,000 TL, including VAT, will have a saving around 5,400,000 TL.
VAT Exemption Amount= (Total Amount spent for Machinery and Equipment) x (VAT Rate*)

= 30,000,000 TL x 0.18

= 5,400,000 TL**

* 18% VAT rate is applicable to investment machinery and equipment provided within the scope of Investment Incentive Certificate, excluding certain cases stipulated in the VAT Law.
** For operating companies which can offset paid VAT with collected VAT, net contribution of this support is the time value of money.

Source: Ministry of Trade / link: https://www.trade.gov.tr/investment/investment-content
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.

Being valid from 01.01.2006, with the Law numbered 5479, Article 19 of the Income Tax Law headed “Exemption of Investment Deduction on Business and Agricultural Earnings” has been abolished, and Temporary Article 69, attached to this Law, regulates the transition period implementations. According to this;

• Exemption amount which could not be deducted before the date of 01.01.2006, by reason of insufficient earnings in previous years,
  • Exemptions which will be calculated on account of investment expenditures which is done after the date of 01.01.2006 within the context of incentive certificates based on applications submitted before the date of 24.04.2003 for the investments which begun within the framework of Additional Articles1-6 of the Income Tax Law abolished previously,
  • Exemptions which will be calculated on account of investment expenditures following the date of 01.01.2006, given that providing economic and technical integrity with investments which began before the date of 01.01.2006 within the scope of Article 19 of Income Tax law,

can be deducted as exemption of investment deduction.

(Income Tax Law a.19; Income Tax Law Temporary Article 61; Income Tax Law Temporary Article 65; Income Tax Law Temporary Article 69; Income Tax Circular/1; Income Tax Circular/22; Income Tax Circular/23; Income Tax Circular/32)

Source: Revenue Administration (link: https://www.gib.gov.tr/en/references-and-resources/tax-incentives/a)
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.

According to Article 5/h of Corporate Tax Law, earnings from construction, repair, installation works and technical services carried out abroad and transferred to the general result accounts in Turkey, are exempt from corporate tax without any conditions.

In terms of the application of this exemption, it is not obligatory to bring earnings taken from construction, repair, installation and technical services carried out abroad into Turkey. Adding the aforesaid earnings to the general result accounts in Turkey is enough to benefit from the exemption.

Source: GİB
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.

Pursuant to Article (17/4-r) of the Law No. 3065, handovers carried out by the sale of the shares of subsidiaries and the immovables which are in the assets of the corporation for at least two full years shall be exempted from VAT, in Turkey.

In order to be exempted from the sale of immovables (land, real property, buildings) to be sold and shares of subsidiaries, 2 full years (730 days) must have been registered in the corporation’s assets.

Exemption clause shall not be applied in the delivery of immovables in the assets of corporations, which trade assets within the scope of exception (trading or renting of immovables customarily).

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.

Being valid from 01.01.2006, with the Law numbered 5479, Article 19 of the Income Tax Law headed “Exemption of Investment Deduction on Business and Agricultural Earnings” has been abolished, and Temporary Article 69, attached to this Law, regulates the transition period implementations. According to this;

• Exemption amount which could not be deducted before the date of 01.01.2006, by reason of insufficient earnings in previous years,• Exemptions which will be calculated on account of investment expenditures which is done after the date of 01.01.2006 within the context of incentive certificates based on applications submitted before the date of 24.04.2003 for the investments which begun within the framework of Additional Articles1-6 of the Income Tax Law abolished previously,

  • Exemptions which will be calculated on account of investment expenditures following the date of 01.01.2006, given that providing economic and technical integrity with investments which began before the date of 01.01.2006 within the scope of Article 19 of Income Tax law,

can be deducted as exemption of investment deduction.

(Income Tax Law a.19; Income Tax Law Temporary Article 61; Income Tax Law Temporary Article 65; Income Tax Law Temporary Article 69; Income Tax Circular/1; Income Tax Circular/22; Income Tax Circular/23; Income Tax Circular/32)

Source: GİB
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.

Source: Corporate Tax Law

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.

2- WHICH INCOMES ARE SUBJECT TO EXHIBITION AND KERMIS EXEMPTION?
People who are regarded as Limited taxpayers;
2.1- Incomes acquired by commercial activities in exhibitions and kermises organized with the permission of the government,
2.2- Incomes acquired from professional services offered in these exhibitions and kermises are exempted from Income Tax.

Source: Income Tax Law

Date: 20 March 2017

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.

1- When will limited tax payers be exempt from Income Tax?

Limited tax payers are exempt from income tax when they have income from the exhibition and fair and kermes with the by courtesy of government.

2- HOW EXEMPTION IS IMPLEMENTED ON YOUNG ENTREPRENEURS?

2.1- In the article number 6663 of Tax Law, tax payers who are younger than 29 years old, their 75.000 amount income attained through the 3 taxation period in the calendar, will be exempt from the income tax.

2.2- Exemption can be benefited from the date of 10th February 2016, by the ones who are suitable for the provisions of the article number 6663. Consequently, the taxpayers who begin working before that specific day, have the opportunity to benefit from this exemption.

2.3- Exemption will be implemented on the amount of 75.000 in each and every taxation period, and in the case of having income less than decided exemption amount, next year will be the year tax payers can benefit from the exemption.

*** Detailed explanations regarding the tax exemption of young entrepreneurs, can be found in İncome Tax Notification serial number 292.

Source: Income Tax Law

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.

On condition that provisions stated in special laws are reserved and both foreigner and employer meet their legal obligations; persons stated below do not have to get work permit.

1.1- Persons being exempt from work permit with bilateral and multilateral agreements to which Turkey is a party
1.2- Foreigners who reside abroad but come to Turkey for less than one month on the purpose of scientific, cultural and artistic activities and for less than 4 months on the purpose of sportive activities
1.3- Persons who come to Turkey on the purpose of installation, maintenance and repair of imported equipment, giving information about usage of them or purchasing or taking equipment or repair of equipment broken down in Turkey (In-country period cannot be longer than 3 months within one year after the arrival to Turkey and aforesaid person should prove this situation with documents submitted by him/her.)
1.4- Persons who come to Turkey on the purpose of training related to usage of goods and services imported to Turkey or exported from Turkey (In-country period cannot be longer than 3 months within one year after the arrival to Turkey and aforesaid person should prove this situation with documents submitted by him/her.)
1.5- Persons who come to Turkey as a staff in expositions, circus that have an activity or a show outside certified tourism establishments (In-country period cannot be longer than 6 months within one year after the arrival to Turkey and aforesaid person should prove this situation with documents submitted by him/her.)
1.6- Persons who come to Turkey on the purpose of developing his/her knowledge and experience in universities or state institutions and organizations on condition that this period does not exceed 2 years and is limited to period of study (he/she should prove this situation with documents submitted by him/her.)
1.7- Persons who are regarded that they can make a great contribution in the field of socio-cultural and technologic areas and field of education (but this period should not exceed 6 months)
1.8- Foreigners who come to Turkey within the scope of programs run by Center for EU Education and Youth Programs (National Agency) (during the program)
1.9- Foreigners who will serve their internships within the scope of and during the period of students for international experience program supported by Ministry, Ministry of Interior, Ministry of Foreign Affairs and Council of Higher Education
1.10- Foreign tour operators whose duty terms do not exceed 6 months
1.11- Foreign player and other sportsmen/sportswomen and trainers whose demands are confirmed by Turkish Football Federation or General Directorate of Youth and Sports (during their agreements)
1.12- According to bilateral agreements made with governments in accordance with article I/10 of International Convention on Training, Certification and Shift Standards of Shipmen, foreign shipmen who work in ships being out of cabotage area and registered in Turkish International Ship Registry Office and receive “Certificate of Conformity” from the relevant authority
1.13- Foreign experts tasked with projects made within the scope of Turkey – European Union Financial Cooperation

2- HOW SHOULD A FOREINGER GET THE PERMISSON IF HE/SHE IS EXEMPT FROM WORK PERMIT?
If task duration of foreign architects, engineers and urbanists who are within the scope of Vocational Services and subject to exemption provisions exceed 1 month, they are supposed to get work permit from Ministry of Labor and Social Security by proving professional competence and scholastic aptitude and be a member of relevant professional organizations and comply with practices of national institutions and organizations.

3- HOW LONG IS THE VALIDITY PERIOD OF WORK PERMIT EXEMPTIONS?
Validity periods cannot be extended. Moreover, foreigners can take advantage of work permit exemption once in a year. However, a foreigner can take advantage of this right after 3 months of expiration date of work permit which has already been received for the same purposes. If a foreigner requires working more than exemption period, he/she has to get permission from the Ministry.

Foreigners can take advantage of right for multiple entries as long as their in-country periods do not exceed 3 months within 1 year after their arrival to Turkey. Foreigners have to apply to residence permit by notifying Migration Management (where they will perform their duties) about their arrival purposes, their in-country periods and their accommodations within 30 days and in any case as of the date of their arrival before they perform their duties.

***It is required to meet social security liabilities related to foreigners taking advantage of work permit exemptions.

Source: Ministry of Labor and Social Security

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