Tax

Which taxes does an entrepreneur have to pay? How much?

Turkish taxation system is similar to EU systems. Please click here for an overview of all taxes and mandatory contributions for a medium-sized company in Turkey. The taxes commonly applicable for entrepreneurs are

Corporate Income Tax (CIT)/ Kurumlar Vergisi – 20%

Corporations with legal or business centers located in Turkey, are qualified as residents and subject to tax on their income derived in Turkey and other countries. If both the legal and business centers are not located in Turkey, then these corporations are qualified as non-residents and subject to tax only on their income derived in Turkey. Corporate income tax rate in Turkey is 20%.

Value Added Tax (VAT)/Katma Deger Vergisi (KDV) – 18% (standard)

VAT is an indirect tax on the consumption of goods and services. A person that is registered for VAT is called vendor. VAT must be included in the selling price of every taxable supply of goods or services made by a vendor. In Turkey, commercial, industrial, agricultural, and independent professional goods and services, goods and services imported into the country, and deliveries of goods and services as a result of other activities are all subject to VAT. The generally applied VAT rate varies between 1%, 8%, and 18%

Withholding tax

There are two major kinds of withholding taxes:

Tax and contributions required to be deducted by an employer from an employee’s remuneration. The withholding tax on salary – income taxes deducted by employers range from 15% to 35% in Turkey.
Withholding tax when resident corporations pay out dividends to its shareholders. Dividend distributions to individual and non-resident corporate shareholders are subject to withholding tax at a rate of 15% in Turkey.

How do I pay for my tax?

Corporate Income Tax (CIT)

Corporate tax is assessed on the base declared through tax returns filled annually by companies. In Turkey, Companies need to pay advance corporate tax quarterly based on their quarterly profits. These taxes are used to offset the corporate tax returns, which are assessed once per year.

The advance tax return should be submitted at the latest by the 14th of the second month following the quarter period
The last date of submission of the corporate income tax return is the 25th of the fourth month following the fiscal year end.

Value Added Tax (VAT)

Any person or entity engaged in an activity within the scope of the VAT Law must notify the local tax office where his place of business is located. If there is more than one place of business, registration is performed at the tax office that is authorized with respect to individual or corporate income tax. You can access here for more information about VAT and its payment.

Starting or running a business?

Tax