Impostos a Turquia

Company Tax

Following the Law number 7456 published in 15 July 2023, the corporate income tax rate has been increased to 25% from 20% for companies other than those in the financial sector.

The corporate income tax rate is reduced by 1% for profits derived exclusively from manufacturing activities and export operations.

Tax Rate For Foreign Companies

Resident companies, with their legal seat or place of management in Turkey, are full taxpayers and are taxed on worldwide income. Non-resident companies are limited taxpayers and taxed only on income derived in Turkey.
Branches are taxed solely on the income derived from activities in Turkey since they are regarded as non-resident entities for Turkish tax purposes. Branch profits are subject to Turkish CIT at the rate of 20%  (same as subsidiaries).
The branch profit transferred to headquarters is subject to dividend withholding tax at a rate of 10%, effective from 22 December 2021 (previously the WHT was 15%). There are tax treaties signed by Turkey that provide withholding rates less than 10% on dividends under certain conditions (applicable subject to the fulfilment of the treaty eligibility conditions).

Capital Gains Taxation

Long-term capital gains of a company are taxed as ordinary income, with an exemption of 75% of capital gains from the sale of shares in domestic participations (provided that the shares have been held for at least two years and the gains from the sale will be kept in a special reserve account for at least five years).
Capital gains from the sale of immovable property held for a minimum period of two years are exempt from tax up to 50%.

A Turkish international holding company can avoid corporate income tax on capital gains from selling foreign participation, as long as the foreign participation has been held for a minimum of two years. To qualify as an international holding company, the Turkish company needs to meet the following criteria:

• It must be a corporation.
• At least 75% of its total assets (excluding cash) must consist of foreign participations held continuously for at least one year.
• It must own a minimum of 10% of the capital of each foreign participation.
• The foreign participation must be in the form of a corporation or limited liability company.

Main Allowable Deductions and Tax Credits

Expenses that can be deducted from the corporation tax base include ordinary and necessary expenses incurred in the course of general business, real property tax related to business, bad debts, and expenses for research and development. An allowance is available until the end of 2023 to companies that carry out qualifying R&D and design activities (100% of expenditure in addition to a deduction for such expenditure in the statutory accounts). Moreover, 80% of the income tax computed on the wages of R&D and design personnel is exempt from income withholding tax (the rate is increased to 95% for employees with a PhD or master’s degree in fundamental sciences, and 90% for employees with a master’s degree in any field or an undergraduate degree in fundamental sciences). Companies are also exempt from stamp duty on any R&D-related documents and goods imported to this end are exempt from customs duties. In addition, an increase in R&D expenditure compared to the previous year (at least by 20%) gives rise to further deductions.

Start-up expenses are considered deductible expenses as incurred. Moreover, the taxpayer has the option to capitalise such expenses and depreciate them over five years in equal amounts.

Donations to listed charities and for the construction of schools, hospitals, and scientific research organisations are deductible at up to 5% of the company’s gross profit. Under certain conditions, payments for pensions and employee termination benefits are deductible for corporate income tax purposes.

"Strategic" investments (as determined by the government, such as investment in the production of products that rely heavily on imports) give rise to a deduction of up to 100% of corporate tax, along with several other advantages concerning customs duties, employer's social security contributions, etc.

Companies, excluding those in the banking, finance, and insurance sectors, may benefit from a tax incentive called the notional interest deduction when making cash capital contributions. This deduction allows companies to subtract a calculated notional interest, based on their capital amounts contributed after July 1, 2015, from their taxable income. The deduction is equal to 50% of the notional interest calculated on the qualifying capital increase (after accounting for qualifying decreases). However, for capital sourced from abroad, the deduction rate is increased to 75%. The notional interest rate is determined by the annual interest rates announced by the Turkish Central Bank for commercial bank credits.

Tax losses can be carried forward for up to five years. The carryback of losses is prohibited. Charges for royalties and interest paid to foreign affiliates may be deductible for corporate income tax purposes when transfer pricing and thin capitalisation rules are followed.

For further information on available tax incentives, consult the dedicated page on the Revenue Administration portal.

Other Corporate Taxes

Buildings and land owned in Turkey are subject to an annual real estate tax at different rates: 0.2% for buildings, 0.1% for dwellings, 0.1% for land, and 0.3% for building sites (such rates are increased by 100% for buildings and land located within larger cities).
Real estate transfers are subject to a tax calculated as 4% of the acquisition/transfer value, which is split equally between the buyer and the seller.

Stamp tax applies to a wide range of documents, including, financial statements, and payrolls. Stamp tax is levied as a percentage of the value stated on the agreements at rates varying between 0.189% and 0.948%. Salary payments are subject to stamp tax at a rate of 0.759% over the gross amounts.

From 1 March 2020, Turkey levies a "Digital Service Tax" of 7.5% on service providers whose revenue derived from digital services during the previous fiscal year exceeds TRY 20 million in Turkey or EUR 750 million worldwide. The president is authorized to double the rate or reduce it to 1%, depending on the type of digital service.

A banking and insurance transaction tax applies at a general rate of 5% on bank and insurance charges. A Resource Utilisation Support Fund applies on foreign currency-denominated loans at varying rates according to their maturity, as well as on TRY-denominated loans with a maturity of less than a year. Foreign exchange purchases from banks, insurance companies, and foreign exchange offices, are subject to a 0.2% rate.
Other taxes include a tourism share (levied at TRY 2 and TRY 7.5 per TRY 1,000 of total net sales and leasing income) and an accommodation tax (set at 2%, the tax was implemented from 1 January 2023).

Social security contributions for both the employer and the employee total 34.5% of an employee’s salary; 14% paid by the employee and 20.5% by the employer. In addition to social security payments, unemployment contribution is 3% of the salary, 1% for the employee and 2% for the employer. The monthly social security ceiling is TRY TRY 75,060 for the period running from 1 January to 31 December 2023.

Other Domestic Resources

Revenue Administration

Doing Business: Turkey, to obtain a summary of taxes and mandatory contributions

Tax Rate

Allowable Deductions and Tax Credits

For individual employees, no business deductions are permitted. Contributions to approved pension schemes within Turkey are allowed for deductions.

Donations to specific institutions are tax-deductible. Individuals paying their taxes via annual tax returns can deduct their documented education expenses incurred in Turkey by themselves and their families from income declared on the tax return, up to 10% of the income tax base. Personal insurance premiums (for self, spouse, and/or children) are deductible but are limited to 15% of the individual's monthly gross income and annual minimum wage amount.

For business income, the same general deductions as apply to corporations are available.

Special Expatriate Tax Regime

Individual residents are taxed on worldwide income while non-resident individuals are only taxed on income derived in Turkey. There is no special tax regime for expatriates.
If a foreign national is covered by the social security system of their home country, they are not obligated to pay Turkish social security premiums for a maximum period of three months. However, this exemption is contingent upon providing proof of foreign coverage to the local social security office. In cases where a social security treaty exists between the home country and Turkey, the exemption period may be extended based on the terms of the treaty. In situations where the employee is not subject to foreign social security, they will typically be required to make full contributions to the Turkish social security system.