- INCOME TAXES
1.1 Personal Income Tax
According to the Turkish Income Tax Law, individuals are subject to income tax on the income they earn within a calendar year. Taxable income may consist of one or more of the following income categories:
- Commercial income
- Agricultural income
- Wage income
- Self-employment income
- Income from immovable property (rental income)
- Income from movable property (investment income)
- Other gains and revenues
As of 2025, the personal income tax rates vary progressively between 15% and 40%, depending on the income bracket.
1.2 Corporate Income Tax
Legal entities such as companies are subject to corporate income tax on their profits. Taxpayers liable for corporate tax include:
- Capital companies (e.g. Joint Stock, Limited Companies)
- Cooperatives
- State Economic Enterprises
- Economic enterprises affiliated with foundations and associations
- Joint ventures
The corporate income tax rate is 25% as of 2025. (This rate may be subject to change by presidential decree.)
- TAXES ON EXPENDITURES
2.1 Value Added Tax (VAT)
VAT is levied on the supply of goods and services in Turkey. The standard VAT rate is 20%, while reduced rates of 10% and 1% apply to specific goods and services. VAT is collected at the time of delivery or performance of service.
2.2 Special Consumption Tax (SCT)
SCT is levied once only (unlike VAT) on certain goods grouped into four categories:
- Petroleum products, natural gas, solvents
- Motor vehicles
- Alcoholic beverages and tobacco products
- Luxury consumer goods
2.3 Banking and Insurance Transactions Tax (BITT)
Although banking and insurance transactions are exempt from VAT, they are subject to BITT. This tax is generally levied at a rate of 5%, and 1% for certain interbank transactions. No tax is applied on foreign exchange transactions since 2008.
2.4 Stamp Duty
Stamp duty is applicable to a wide range of documents, including contracts, financial statements, payrolls, letters of guarantee, and undertakings. The applicable rates range from 0.189% to 0.948% of the document value. Some documents are subject to a fixed stamp fee.
- WEALTH TAXES
3.1 Property Tax
Property owners in Turkey are required to pay annual real estate tax. Rates vary between 0.1% and 0.6%, depending on the type and location of the property. In addition, 10% of the accrued tax amount is collected as a Contribution to the Protection of Cultural Heritage.
3.2 Motor Vehicle Tax (MVT)
Motor vehicle owners pay this tax annually based on the age and engine size of the vehicle. Payment is typically made in two installments per year.
3.3 Inheritance and Gift Tax
Applicable on wealth acquired through inheritance or donation. The applicable rates range between 1% and 30%, depending on the amount and relationship degree.
CONCLUSION & REMARKS
This note is intended to provide general information to the client regarding the Turkish tax system. For a detailed evaluation specific to your personal or corporate situation, further legal and financial analysis in line with the Turkish Tax Code and regulations issued by the Revenue Administration is required.
