EDUCATION AND HEALTH EXPENSES
Education and health expenses incurred as outlined below may be deducted from the declared income through the annual tax return, provided they do not exceed 10% of the reported income.
• Education and health expenses must be incurred within Türkiye.
• These expenses must be substantiated with documents obtained from individuals or legal entities subject to income or corporate tax.
- These expenses must relate to the taxpayer, their spouse, or their minor children.
The term “minor children” refers to children who live with the taxpayer or are supported by the taxpayer (including those receiving alimony, adopted children, and grandchildren who have lost both parents and live with the taxpayer), who are under 18 years of age or under 25 if they are in education.
Example:
Example 4: Taxpayer (D) earned interest income of 1,350,000 TL from foreign currency-denominated government bonds (Eurobond) and a total annual gross rental income of 900,000 TL from leasing a property for 75,000 TL gross monthly rent (net monthly rent is 60,000 TL). A 20% withholding tax of 180,000 TL was deducted from the rental income during 2023.
Taxpayer (D) paid 165,000 TL, including VAT, for their 12-year-old child’s private school education and 285,000 TL, including VAT, for their spouse’s medical expenses at a private hospital, both supported by invoices.
Taxpayer (D) opted for the lump-sum expense method regarding the rental income from the property.
Since the interest income is derived from foreign currency-denominated government bonds (Eurobond), no reduction rate will apply to this income, and the total rental income and interest income from government bonds exceed the declaration threshold of 150,000 TL, meaning it must be declared.
Education and health expenses may be deducted from the declared income through the annual tax return, provided they are incurred within Türkiye, substantiated with documents from income or corporate taxpayers, relate to the taxpayer, spouse, or minor children, and do not exceed 10% of the reported income. Therefore, although a total of 450,000 TL (165,000 + 285,000) was spent on education and health expenses, only 211,500 TL (10% of 2,115,000 TL) can be deducted from the declared income.
The tax payable on the rental income will be calculated as follows:
Interest Income from Government Bonds: 1,350,000 TL
Rental Income from Property (Workplace): 900,000 TL
Expenses (Lump-sum) (900,000 x 15%): 135,000 TL
Net Income (Rent) (900,000 – 135,000): 765,000 TL
Total Income (1,350,000 + 765,000): 2,115,000 TL
Education and Health Expenses (10% of Declared Income): 211,500 TL
Taxable Income (2,115,000 – 211,500): 1,903,500 TL
Calculated Income Tax: 622,800 TL
Withheld Taxes: 180,000 TL
Income Tax Payable (622,800 – 180,000): 442,800 TL
Stamp Duty Payable: 467.20 TL
Source: Revenue Administration – https://www.gib.gov.tr/sites/default/files/fileadmin/beyannamerehberi/2024/2024KiraGeliriRehberi.pdf
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