My company's taxes
Corporate Taxes in Turkey
Turkey is one of the most diverse countries in the world, and it's fair to say that the tax system in Turkey differs from that of any other country in the world.
1. Individual Income Tax in Turkey
Individual taxes and corporate tax operate under several criteria and standards, through which an individual's net income, its source, and the applicable tax rates are determined. We explain these as follows.
Individual income tax: this is calculated based on the average net annual income of a foreign resident in Turkey or of a Turkish citizen, and ranges between 15% and 35% of net annual profits. Annual profits include monthly salaries, rental income from properties, and commercial, agricultural, and personal-service earnings.
2. Tax Imposed on the Rental Value of a Company's Premises in Turkey (known as "Stopaj" / Withholding Tax)
This is calculated and collected by the tax offices based on the monthly rental value, every three months, at a rate of 7.5% of the monthly rent — meaning that if the rent is 100, the company owes a rental tax of approximately 7.5 for every three months.
3. Corporate Income Tax in Turkey
This tax is imposed on a company's official earnings, not on the value of the company's capital.
It is calculated approximately as a percentage of the company's income, and this percentage ranges between 20% and 22%.
Income tax for partners or shareholders in the company is calculated at a rate of 15%.
As for Turkish companies operating outside Turkey, the tax is calculated at 15% when profits are transferred to the parent company in Turkey. These taxes apply within a limited and specific scope to Turkish companies.
4. Profit Tax on Movable and Immovable Property Owned by Companies
A profit tax is imposed on movable and immovable property duly registered in the company's name — that is, based on the profit relative to capital. It is approximately estimated as follows:
Where the profit rate exceeds 40,000 Turkish lira, the rate is 35% of the profit.
Where the profit rate is between 18,000 and 40,000 Turkish lira, the rate is approximately 27%.
Where the profit rate is between 7,000 and 18,000 Turkish lira, the rate is approximately 25%.
Where the profit rate is between 6,000 and 7,000 Turkish lira, the rate is approximately 15%.
These rates relate to immovable assets such as real estate, commercial premises, and so on.
Note: there are certain taxes related to specific product types and special cases, which may be higher or lower than the usual rates depending on the level of state support for particular products — the tax value can reach up to 100% for some products and around 1% for others. This is worth noting.
5. Tax Exemptions for Companies in Turkey and Investment Incentives
The Turkish government has established numerous investment programs, whether in real estate, industry, or trade — particularly for opening factories in cities that are still under development. This allows foreign investors to direct their investments to areas the state is supporting for development, and to obtain benefits and facilities such as infrastructure and even very low rental rates, as well as exemptions from import duties when importing raw materials and manufacturing machinery for the first time. You can research and verify whether the conditions suit your investments, and even obtain preliminary approvals from the relevant provincial or municipal center.
We should also note the Turkish state's encouragement of Turkish exporters and manufacturers, through tax rebates on the export of products manufactured locally in Turkey using either Turkish or imported raw materials — building enough strength for the Turkish product to compete powerfully in the market and establish a strong presence for its products across most Arab and European markets.
This is a general summary of the taxes imposed on individuals and companies operating in Turkey. At Hallak Turkey Services Company, we provide you with all the information and consultation needed across various investment fields, along with the necessary feasibility studies to assess investment value and viability for investors wishing to start in Turkey.