Turkey imposes taxes on its residents based on their global income, while non-residents are subject to taxation solely on income derived from Turkish sources.
Social security contributions in Turkey undergo calculation based on specific salary thresholds, ranging from a minimum of TRY 10,008.00 to a maximum of TRY 75,060.00 per month, during the period spanning from January 1, 2023, to July 31, 2023. These contributions are shared between the employer and the employee and are categorized according to labor classifications. Turkish nationals typically bear a general rate of 20.5% for employers (with the possibility of a 5% reduction to 15.5% under specific conditions) and 14% for employees.
For foreign nationals who maintain coverage under their home country’s social security system, there is a three-month exemption from Turkish social security premiums, provided they furnish proof of their foreign coverage to the local social security office. If a social security treaty exists between the home country and Turkey, the exemption period may be extended based on the provisions of the treaty. In cases where the employee is not subject to foreign social security, Turkey typically enforces full contribution requirements.
It’s noteworthy that the portion of social security contributions paid by the employee is eligible for deduction when determining taxable income.
Additionally, in the context of unemployment insurance, premiums are calculated based on an income cap of TRY 75,060.00 per month for the period from January 1, 2023, to July 31, 2023. These premiums are collectively funded by the employee, employer, and the state, each contributing at the following rates:
- Employee: 1%
- Employer: 2%
- State: 1%
Foreign nationals are eligible for this insurance provided that a reciprocity agreement exists between Turkey and their home countries.
Goods and services transactions in Turkey are subject to Value-Added Tax (VAT), with rates ranging from 1% to 18%. The standard VAT rate stands at 18%. For more detailed information, please refer to the “Other taxes” section within the Corporate Tax Summary.
Turkey does not impose national wealth taxes.
Individuals receiving property through inheritance or as a gift are liable for Inheritance and Gift Tax, which applies at rates ranging from 1% to 30%. Tax payments made in a foreign country for inherited assets are subtracted from the tax computed based on the asset’s value. Inheritance and gift tax payments are spread over a three-year period, with biannual installments due in May and November. However, for lottery prizes, the related taxes are withheld at the time of payment.
Stamp duty is currently levied at a rate of 0.759% on the gross salary for individuals who receive their income through a local payroll. For individuals who file tax returns, this duty is replaced by fixed filing fees, which currently amount to TRY 294.90.
Property tax is calculated for each property based on its assessed value at the year of acquisition, which is subsequently updated annually with half of the revaluation rate declared by the Ministry of Finance. The tax rate for taxable values of residential buildings is 0.1%, while it’s 0.2% for other types of buildings. For land properties, the tax rate is 0.3%. These rates are doubled in metropolitan areas.
In addition to property tax, a new tax category was introduced in 2019 for residences located in Turkey valued at over TRY 9,967,000 for 2023. This tax is calculated on the excess value of the residence, with applicable rates ranging from 0.3% to 1.0%, depending on the residence’s value.
Local Non-Income Taxes in Turkey
There are no local taxes in Turkey, except for some minor transaction fees and immovable property taxes imposed and collected by municipalities.
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