It’s clear to anyone that there is a definite cooperation between the Turkish people, and the government regarding taxes, including income tax, whether deducted from the income of individuals or companies as determined by law.
The Turkish government is keen from time to time to make amendments to the articles of the law on income tax; For example, deferring the tax payments accumulated on individuals and institutions until their status is settled.
As happened at the beginning of this year 2021, when the Turkish Ministry of Finance announced its decision regarding the postponement of income tax entitlement to sectors whose activities were temporarily or permanently suspended under compulsory circumstances.
In this article, we provide a detail of the two types of income tax: the individual income tax and the corporate income tax.
Income Tax for Individuals
It is the tax withheld from the profits and income earned by an individual during one year.
This tax is imposed on the following revenues:
- Business profits.
- Agricultural profits.
- Freelance earnings.
- Real estate capital gains.
- Capital Gains of Securities.
- Salaries and wages
- Earnings and other income.
Who Should Pay Income Tax in Turkey?
- All residents of Turkey, whether Turks or foreigners affiliated with official offices and institutions.
- Residents in Turkey for more than 6 months without interruption during the year.
- Turks residing outside Turkey who own establishments that conduct commercial activities inside Turkey.
Corporate Income Tax
This tax applies to the income of legal entities representing companies that conduct business in Turkey.
Which Institutions are Included in Corporate Income Tax?
- Capital companies.
- Cooperative Organization.
- Public economic establishments.
- Private economic establishments.
- mutual projects.
It is worth noting that corporate income tax does not apply to capital, but is applied to profits only after distribution or transfer.
Corporate Income Tax Rate
- Between 20 and 22% on the profits of commercial companies.
- 15% on the income of companies residing in Turkey when distributing profits to shareholders in the company.
- 15% on companies not residing in Turkey when transferring profits to the headquarters in Turkey.
This was a presentation of the most important information related to the individual income tax and the corporate income tax. If you want to know more information about the income tax for any of them, or if you wish to pay one of the taxes due, contact us at Trustus, to take care of all legal procedures on your behalf. to complete the payment process.
Edited by: Trustus Consulting©
