A private ruling request regarding the taxation of foreign-earned income in foreign currency involved the case of an individual working remotely for a company operating in Finland. The person asked about their income tax status in Turkey. According to the Income Tax Law, individuals residing in Turkey are subject to taxation on both their domestic and foreign income. However, salaries paid in foreign currency by non-resident employers without a legal or business center in Turkey can be exempt from income tax, provided certain conditions are met. These conditions include the employer not earning income in Turkey, the salary being paid in foreign currency, and the payment coming from income generated abroad.
Furthermore, under the double taxation agreement between Turkey and Finland, if the services are not performed in Finland, the income will be taxed only in Turkey. In such a case, the taxation will be carried out under Turkish domestic law. However, if the services are performed in Finland, the right to tax may also belong to Finland if certain conditions are met.
Source: Revenue Administration
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