Welcome to Turkey, a country renowned for its competitive corporate tax rates and clear, internationally aligned tax legislation. Türkiye 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.
Income Taxes
Under Turkish tax legislation, we have two primary income taxes: personal income tax and corporate income tax.
Personal Income Tax
Individuals are subject to personal income tax on their net earnings and revenues within a single calendar year. This includes various income elements such as agricultural profits, business profits, salaries, income from independent personal services, rental income, income from capital investments, and other sources. Personal income tax rates range from 15% to 40%, depending on the income bracket. For the year 2024, the applicable rates are as follows:
| Income Scales (TRY)
(Employment Income) |
Rate (%) | Income Scales (TRY)
(Non-Employment Income) |
Rate (%) |
| Up to 110,000 | 15 | Up to 110,000 | 15 |
| For 110,000 of 230,000 is 16,500, and over.. | 20 | For 110,000 of 230,000 is 16,500, and over.. | 20 |
| For 230,000 of 580,000 is 40,500, and over.. | 27 | For 230,000 of 870,000 is 40,500, and over.. | 27 |
| For 580,000 of 3,000,000 is 135,000, and over | 35 | For 870,000 of 3,000,000 is 213,300, and over | 35 |
| For 3,000,000 is 982,000, and over | 40 | For 3,000,000 is 958,000, and over | 40 |
Source: Investment Office of Turkiye
Corporate Income Taxes
If income elements defined in the Income Tax Law are derived by corporations, the corresponding legal entities are subject to taxation. Corporate taxpayers include capital companies, cooperatives, public economic enterprises, economic enterprises owned by associations and foundations, and joint ventures. In Turkey, the corporate income tax rate for business profits was 25% in 2021 and has been reduced to 23% in 2022.
Taxes on Expenditure
In addition to income taxes, Turkey imposes taxes on expenditure to fund essential services and infrastructure.
Value Added Tax (VAT)
VAT is applicable to a wide range of goods and services, including commercial, industrial, agricultural, and independent professional offerings, imported goods and services, and various activities. The standard VAT rates in Turkey are set at 1%, 8%, and 18%, depending on the nature of the goods or services.
Special Consumption Tax (SCT)
Certain product groups are subject to SCT at varying tax rates. These include petroleum products, natural gas, lubricating oil, solvents, derivatives of solvents, automobiles, motorcycles, planes, helicopters, yachts, tobacco and tobacco products, alcoholic beverages, and luxury items. Unlike VAT, SCT is levied only once, and the tax rates differ based on the product category.
Banking and Insurance Transaction Tax
While banking and insurance transactions are exempt from VAT, they are subject to a Banking and Insurance Transaction Tax. This tax is applied to income earned by banks, such as loan interest. The general rate is 5%, but specific transactions, such as interest on deposit transactions between banks, are taxed at 1%. Since 2008, sales from foreign exchange transactions have been exempt from this tax.
Stamp Duty
Stamp duty is applicable to various documents, including contracts, notes payable, capital contributions, letters of credit, letters of guarantee, financial statements, and payrolls. The duty is calculated as a percentage of the document value, ranging from 0.189% to 0.948%. Some documents have fixed prices (pre-determined) for stamp duty.
Taxes on Wealth
Turkey imposes three types of taxes on wealth: property taxes, motor vehicle tax, and inheritance and gift tax.
Property Taxes: Buildings, apartments, and land owned in Turkey are subject to real estate tax, which ranges from 0.1% to 0.6%. Additionally, a Contribution to the Conservation of Immovable Cultural Property is levied at a rate of 10% of the real estate tax.
Motor Vehicle Tax: Motor vehicle taxes are based on fixed amounts that vary according to the age and engine capacity of vehicles each year.
Inheritance and Gift Tax: Inheritance and gift taxes are applicable at rates ranging from 1% to 30%.
