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Paying tax in Turkey for income in 2017

6th March 2018

In Turkey, as in any other country, people who earn money are supposed to pay tax on their income. Foreign residents who work or have businesses in Turkey usually have accountants dealing with the tax issues, but income from rent, capital gains for having sold a property, or – if the tax payer is under Turkish fiscal law - income from stock sales are also liable to tax.

Who is liable to paying income tax (‘gelir vergisi’)?
Even though you may be liable to tax in your home country, if the property you rent out/you have sold is located in Turkey, you have to pay tax in Turkey.
If your total rental income in 2017 is below 3.900 TL you are not obliged to make a declaration, as this falls under the tax-exempt amount. (Different rules apply for income from business property rentals, but I will not focus on this subject as most foreigners rent out residential property). If you have rented out more than one property, please keep in mind that the tax-exempt amount is only applied once, not for every property.
If you have made more than 3.900 TL you should apply to the tax office (vergi dairesi) responsible for the area of your property before March 25th.
It is also possible to make a tax declaration on the internet, but you will need help from a Turkish speaker to find your way through the system. (

Making a tax declaration for rental income
Taxable income from last year must be declared until 25th of March of the following year (in 2018, the deadline should be March 26th, as 25th is a Sunday).
To make the declaration, apply with your tax number to the closest ‘vergi idaresi’. Depending on the last digits of your tax number (‘vergi numarası’) there will be one particular officer in charge of you. If you don’t have a registered address in Turkey you will be asked to register an address at a different counter before going ahead with the declaration.
You do not need to bring the ‘tapu’ (title deed) or bank books showing the income, your declaration should just state the address where the property is located and is otherwise based on trust.

Two different ways of calculating the tax for rental income
Apart from the 3.900 tax-exempt amount you have the possibility to have expenses you made on the property deducted from your taxable income. You can either present invoices regarding material or work done for the property, related insurance policies and the like, or choose to have a flat rate for expenses deducted from the taxable income. As of 2018, the flat rate is reduced from 25% to 15% of the total income (after deduction of the 3.900 TL). The officer will let you decide whether you prefer the flat rate ‘götürü gider usulü’ or the real expenses ‘gerçek gider usulü’ option and calculate your income tax accordingly. The tax amount is calculated based on a ‘slice’ system – 15% tax is applied on the first slice (up to 14.800 TL), 20% for the next slice (up to 34.000 TL), 27% on the third slice (up to 80.000 TL) and 35% for all income over 80.000 TL.
Example: If you declare a rental income of 50.000 TL, the taxable amount is 46.100 TL (-3.900 TL). If you choose to deduct the flat rate – 46.100TL-6.915TL – your taxable income is 39.185TL. You will have to pay 15% tax on the first slice (14.800 TL), then 20% on the next slice, and 27% on the rest – please ask an accountant or the tax officer for exact figures)

Tax payment
After having entered all your data the officer in charge will calculate the ‘vergi tahakkuku’, the tax amount due. You can pay it all at once until end of March or in two instalments (end of March, end of July) directly at the tax office.

Capital gains tax
A private owner of immovable property is liable to paying capital gains tax if he/she sells the property at a higher price than the purchase price (indicated on the title deed) within 5 years from the purchase date. There is no tax liability for the sale of property that has been held by a private owner longer than five years. The longer you have owned the property the higher the tax-exempt amount will be. The tax amount due is calculated according to the above-mentioned slices (15%, 20%, 27%, 35%).

What happens if I don’t declare my income?
This question is hard to answer – as the declaration of rental income is mainly based on trust and goodwill, it may well be that nothing happens at all. But there is always a possibility that neighbours or jealous people of any kind report you to the tax authorities. Turkey has long been rather lax with tax collection, but tax controls have lately become much stricter, so for your own peace of mind and in order to prevent nasty surprises we recommend that you abide with the Turkish tax legislation.




Written by Annette HANİSCH - YellAli Consultant

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