Types of Taxes in Turkey: A Comprehensive Guide

By Justin Mays:

Turkey’s taxes occupy an important place in the economy. For those who wish to move and start a life in Turkey, understanding the tax system can benefit them greatly. In today’s blog, Prime Property Turkey brings you all the information about the types of taxes in Turkey. Stay tuned!

Types of Taxes in Turkey

The tax system in Turkey has three types of taxes:

1. Income Taxes

Turkish income taxes include two main categories: personal income tax and corporate income tax. 

Personal Income Taxes

The income of every individual, whether foreign or domestic, is subject to personal income tax, which includes the total earnings and profits of a person in a year. Every individual who lives in Turkey has to pay taxes on their income. Non-residents, however, have to pay income tax only on the income they earn within the country.  

The following types of income are subject to personal income tax: 

• Agricultural profits
• Business profits
• Salaries
• Income from property, etc. 

The personal income tax rates are 15% to 40%.

Corporate Taxes

Corporate companies in Turkey are subject to corporate income tax, and Turkish law defines them as:

• Capital companies
• Cooperatives
• Public economic enterprises
• Joint ventures
• Economic enterprises owned by associations and foundations

The corporate income tax rate on business revenue is 23%. 

Further Reading: Getting Title Deed in Turkey | FAQ Guide

2. Taxes on Expenditure 

This tax category includes Value Added Tax (VAT tax), Special Consumption Tax (SCT), Banking and Insurance Transaction Tax and Stamp Duty. 

Value Added Tax (VAT)

The VAT rates typically include 1%,8%, and 18%. The VAT tax applies to sales of goods such as commercial, agricultural, etc., and services as well as goods imported to Turkey. 

Special Consumption Tax (SCT)

The Special Consumption Tax (SCT) is different from VAT since it is only levied once and includes the following four product categories:

• ​Petroleum products, natural gas, lubricating oil, solvents, and derivatives of solvents.
• Vehicles, aircraft, yachts, etc.
• Luxury goods, including cell phones. 
• Alcoholic beverages, tobacco, cigarettes.

Banking and Insurance Transaction Tax 

The VAT tax is not levied on banking transactions and insurance companies; however, they are subject to the Banking and Insurance Transaction Tax. This type of tax is related to the transactions made by banks and their income, as well as that of insurance companies. The rate for the Banking and Insurance Transaction Tax is 5%. Also, foreign exchange transactions bear no tax. 

Stamp Duty 

Stamp duty is levied on documents. These documents include contracts, payroll, receipts, papers on any commercial transactions, etc. The tax rate for the stamp duty ranges from 0.189% to 0.948%, depending on the document’s value. Certain documents, however, have a fixed stamp duty tax. 

3. Taxes on Wealth

This category encompasses three types of wealth taxes: property, motor vehicle, and inheritance and gift taxes. 

The real estate tax is levied on all ownership of buildings and land in Turkey. The rate for this tax is between 0.1% and 0.6%.

Motor vehicle taxes, on the other hand, are paid in two installments and are at a fixed rate, depending on the age of the vehicle and the engine’s capacity.

Inheritance and gifts are subject to a tax rate of 1% to 3%. This tax is paid in two installments. 

Further Reading: invest.gov.tr (Tax Guide)

Property Taxes in Turkey

Purchasing real estate in Turkey includes the following taxes: 

• Property transfer tax
• Stamp duty
• Government fees
• VAT

The tax rate of a property transfer is 4% and is meant to be paid by the buyers and seller. 

To Wrap it Up

Anyone who has lived in Turkey for more than six months is considered a resident and has to pay taxes on their income. We hope you find our article on the types of taxes in Turkey helpful. If you have any more questions, our legal team can answer them for you. So contact us and get the best real estate consulting services in the market. 

More to read from us:

All About Buying A Property In Turkey

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