Bradford Jacobs is a global leader in recruitment, payroll and taxation. For more than 20 years, we have ensured our clients comply with every aspect of taxation legislation wherever they operate worldwide. Our combination of local ‘know-how’ and global experience is vital for foreign companies moving into the Republic of Türkiye, and dealing with tax in Türkiye while overseas can be tricky and pose complications that would demand expert guidance.
The admin workload can weigh heavily on your business operations. Türkiye’s corporate tax regime is fluid, with rates above the standard 20% rate until 2023. Employers operating payroll must also comply with strict regulations regarding employees’ taxes and social security contributions.
Bradford Jacobs’ dedicated specialists take the burden off your shoulders while you focus on establishing your business in this exciting – but demanding – new territory. From locating the brightest talent to running your payroll, our Professional Employer Organisation (PEO) and Employer of Record (EOR) specialists are with you at every step.
Personal Income Tax (PIT):
There are five tax bands on employment income, starting at 15% on income up to TRY 32,000 (€6,085, US$6,195) with a top rate of 40% on the excess over TRY 880,000 (€167,360, US$170,380). Additionally, there are two bands for tax on non-employment income of 27% for earnings up to TRY 170,000 (€32,330, US$32,910) and 35% for the excess over that. There is no special tax regime for expats.
Social Insurance Taxes:
Employers generally contribute 20.5% of employees’ payroll and deduct 14% from employees’ earnings to remit to the Social Security Institution (SSI).
Corporate Income Tax:
The standard rate of 20% was increased to 25% for returns on earnings in 2021 and 23% for income generated in 2022 before returning to 20% for 2023, depending on legislation. The standard rate for the financial sector is 25%.
Indirect Taxes:
The standard Value Added Tax (VAT) rate of 18% is reduced to 8% for basic foodstuffs, publications (excluding online categories), pharmaceutical products, and 1% for some agricultural products and services. Digital Services Tax (DST) is 7.5% but can be reduced to 1% or increased to 15% on individual cases. Special Consumption Tax (SCT) applies various rates to petroleum, vehicles and luxury goods.
Withholding Tax (WHT):
Resident individuals pay 15% on dividends and 20% on royalties and fees for technical services. Non-resident companies and individuals pay 15% on dividends, up to 10% on interest payments and 20% on royalties and technical services fees.
Capital Gains Tax (CGT):
Capital gains are taxed as income.
| From | Not Over | Tax % |
|---|---|---|
|
TRY 0 |
TRY 32,000 (EUR 6,085 - USD 6,195) |
15% |
|
TRY 32,001 |
TRY 70,000 (EUR 13,312 - USD 13,550) |
20% |
|
TRY 70,001 |
TRY 250,000 (EUR 47,545 - USD 48,400) |
27% |
|
TRY 250,001 |
TRY 880,000 (EUR 167,360 - USD 170,380) |
35% |
|
Over TRY 880,001 |
- |
40% |
Additional Taxes for non-employment income:
| From | Not Over | Tax % |
|---|---|---|
|
TRY 70,000 |
TRY 170,000 (EUR 32,230 - USD 32,910) |
27% |
|
TRY 170,001 |
TRY 880,000 (EUR 167,360 - USD 170,380) |
35% |
Employer’s contribution to the Social Security Institution (SSI) is generally 20.5% of payroll, although, in some circumstances, this can be reduced to 15.5% and is calculated based on employment categories. Employers also contribute 2% to unemployment insurance.
For more information, download our free guide or get in touch with our consultants here