Guidelines For Taxation
Turkey has one of the most competitive corporate tax rates among OECD member countries. The Turkish corporate tax legislation has noticeably clear, objective, and harmonized provisions that are in line with international standards. The Turkish tax legislation may be classified under three main headings:
Income Taxes: The Turkish tax legislation includes two main income taxes, namely personal income tax and corporate income tax.
Personal Income Tax: Real persons’ income is subject to personal income tax. Income is defined as the net amount of all earnings and revenues derived by an individual within a single calendar year. An individual’s income may consist of one or more income elements listed as follows:
-Business profits.
-Income from movable property (income from capital investment).
-Income from independent personal services.
-Agricultural profits.
-Income from immovable property and rights (rental income).
-Other income and earnings.
Individual income tax rates vary from 15% to 40%.
-Public economic enterprises.
-Capital companies.
Taxes on Expenditure
- Petroleum products, natural gas, lubricating oil, solvents, and derivatives of solvents.
- Automobiles and other vehicles, motorcycles, planes, helicopters, yachts.
- Tobacco and tobacco products, alcoholic beverages.
- Luxury products.
- Property taxes.
- Motor vehicle tax.
- Inheritance and gift tax.
Buildings, apartments, and land owned in Turkey are subject to real estate tax ranging at a rate between 0.1% and 0.6%, while Contribution to the Conservation of Immovable Cultural Property is levied at a rate of 10% of this real estate tax. Motor vehicle taxes are collected on the basis of fixed amounts that vary according to the age and engine capacity of the vehicles each year. Meanwhile, inheritance and gift taxes are levied at a rate of 1% to 30%.
