Turkey Personal Income Tax

Individuals who are resident in Turkey (full liability taxpayers) are subject to tax on their worldwide income. Non­residents (limited liability taxpayers) are taxed only on earnings and revenues derived in Turkey.

Residents include individuals with legal permanent residence in Turkey and those who reside in Turkey for more than six months during one calendar year. Temporary absence does not interrupt the continuity of residence in Turkey.

The civil law defines residency as an “intention to settle down.” The law does not specify any objective criteria for the determina­tion of residency. However, factors, such as purchasing an apart­ment in Turkey, closing business operations abroad or having vital social and economic interests in Turkey, may be considered in determining Turkish residency.

An exception to the six-month rule described above applies to expatriates such as businesspersons, scientists, experts, employ­ees of governments or journalists who come to Turkey to perform temporary and predefined work as well as those who have arrived for the purpose of education, medical treatment, rest and travel. Such persons are considered to be nonresidents even if they stay in Turkey longer than six months in a calendar year.

In general, if an individual is a nonresident of Turkey under these rules, the individual is also a nonresident for purposes of the application of Turkey’s tax treaties. This may affect the taxation of non-Turkish income in the source country.

Income subject to tax. Turkey has a unitary tax system under which income derived from different sources is aggregated and tax due is computed on the total aggregate income. Under the unitary system, withholding taxes are considered advance pay­ments of tax and are credited against the tax due in the annual return. Income derived in Turkey by residents and nonresidents are allocated to the following categories:

  • Commercial income
  • Agricultural income
  • Employment income (remuneration)
  • Self-employment earnings
  • Revenues from immovable properties (including royalties)
  • Income from capital investments (dividends and interest)
  • Other earnings and gains (capital gains)

The above categories of income and the rules for determining the sources of such income are described below.

Commercial income. Income derived from every kind of com­mercial and industrial operation through a place of business in Turkey, or through a permanent representative in Turkey, is con­sidered to be income derived in Turkey.

Agricultural income. Income arising from agricultural operations carried out in Turkey is considered to be derived in Turkey.

Employment income. Salary and wages are defined as money and goods given as compensation to employees in connection with a specific place of business as well as benefits provided to them that can be represented in terms of money. No distinction is made between salary and wages in Turkey. Wages include amounts paid as cash, indemnities, allowances, overtime, advances, subscrip­tions, premiums, bonuses, expense accruals or percentages of profits of enterprises that are not partnerships. Certain payments made by employers on behalf of employees, such as payment for rent and utilities are grossed up and taxed as salary and wage income.

Wage income is considered to be derived in Turkey by nonresi­dent individuals if either of the following conditions is satisfied:

  • The employment service is performed in Turkey.
  • The services are evaluated in Turkey. Services are considered to be evaluated in Turkey if the payment for the services is made in Turkey or if the payment for the services is made abroad and the amount of the payment is transferred to the account of or deducted from the profit of a Turkish resident entity.

An employment service is considered to have been evaluated in Turkey if the salaries are booked as a cost or expense by a Turkish entity.

Individuals in Turkey who work for liaison offices and are com­pensated in foreign currency are not taxed on their salaries if all of the following conditions are met:

  • The nonresident entity pays the salaries out of earnings derived abroad.
  • The salary payments are not charged as expenses against profits taxable in Turkey.
  • The amount of compensation is brought into Turkey as foreign currency.

Self-employment earnings. Self-employment earnings include ser­vices rendered by a person who satisfies the following conditions:

  • He or she works on behalf of himself or herself in his or her name.
  • He or she uses his or her own professional knowledge.
  • He or she works without being dependent on an employer.

If benefits are derived from self-employment activities performed in Turkey or if the self-employment activities are evaluated in Turkey, the income derived from such activities is considered to be income derived in Turkey and is accordingly taxable to non­residents.

Recipients of services provided by resident and nonresident self-employed individuals must withhold a 20% tax from the amounts paid to the individuals and remit the withholding tax to the tax offices on behalf of the individuals. If the service provider is a nonresident, provisions of an applicable double tax treaty need to be taken into account.

Revenues from immovable properties. Revenues derived from the rental of immovable properties and rights by their owners, by their holders, by those holding easement and usufruct rights or by their tenants are taxable in Turkey if the immovable property is located in Turkey or if such properties and rights are used or evaluated in Turkey.

Rental income derived by resident and nonresident individuals from immovable assets and royalties for patents and rights are subject to withholding tax at a rate of 20%. For nonresidents, this withholding tax may be eliminated or reduced under applicable double tax treaties.

Capital investment income. The following types of income are included in investment income:

  • Dividends from all types of share certificates
  • Earnings arising from participation shares
  • Profits distributed to the chairman and members of the board of directors of companies
  • Interest income derived from bonds and bills
  • All interest income (time deposits, repurchase [REPO] agree­ments and others)

Resident and nonresident individuals are subject to withholding tax on dividends and interest. A 15% withholding tax is imposed on dividends. The general rate of withholding tax on interest is 15%. The withholding tax rates for interest on term accounts are 15% for a term of up to six months, 12% for a term of up to a year and 10% for a term of more than one year. The withholding tax rates may be reduced under applicable double tax treaties.

Other earnings and gains. The following types of income are included in other earnings and gains:

  • Earnings arising from the sale of securities, rights, copyrights and patents
  • Earnings arising from the disposal of land, immovable proper­ties and ships within five years after the acquisition of the assets
  • Earnings arising from the transfer of rights of partnership shares
  • Earnings arising from the disposal of a whole operation whose activities were halted or from the disposal of part of such operation
  • Incidental earnings

Capital gains. Capital gains are normally considered to be ordi­nary income. However, capital gains derived from transfers of shares are exempt from income tax in certain cases. The rules applicable to capital gains derived from the transfer of shares acquired on or after 1 January 2006 are summarized below.

Under a Council of Ministers’ Decree, the withholding tax rate is reduced to 0% for capital gains derived by resident and nonresi­dent individuals from the sale of shares traded at the ISE. This is the final taxation.

Capital gains derived from the disposal of the shares without the intermediation of a bank or an intermediary institution (that is, capital gains derived by resident and nonresident individuals from the sale of shares not traded on the ISE) are subject to tax at the general progressive income rates (see Rates) and reported in the annual income tax return. However, if the shares are issued by Turkish resident companies and held for more than two years, the gain is not subject to income tax.

Taxation of employer-provided stock options. No specific rules in Turkey govern the tax treatment of employer-provided stock options. Under the general tax provisions, options are taxable as employment income at the time of exercise. The time of taxation may vary depending on the stock option plan. In addition, under certain circumstances, stock options are subject to stamp tax at a rate of 0.759% and may be subject to social security contribu­tions (see Section C).

Deductions. In determining taxable income, expenses allowable under the income tax law are deducted from gross revenue.

Individuals who render independent professional services or who carry out commercial activities may deduct ordinary business-related expenses from taxable income, including salaries, rental payments, fees and the cost of utilities. Depreciation on fixed assets is also allowed. Penalties are not deductible.

The employee portions of social security contributions and unemployment insurance premiums are deductible from gross employment income.

Premiums paid by the employee for himself or herself, his or her spouse or children with respect to personal insurance policies covering life, death, accident, illness, disablement, unemployment, maternity, birth and education are deductible if the following conditions are satisfied:

  • The insurance policy is concluded with an insurance company that is located in Turkey and whose headquarters is in Turkey.
  • The amount of the monthly premium or membership fee may not exceed 15% of the salary earned in that month.
  • The annual total of the monthly premiums and membership fees that are paid must not exceed the annual legal minimum wage determined by the law (TRY1,647 per month, effective from January 2016).

Lighting, heating, water, elevator, administration, insurance, inter­est, tax, depreciation, and maintenance expenses paid by an individual who earns rental income can be deducted from taxable rental income.

Rates. In principle, individual income and gains calculated on a cumulative basis are subject to income tax at progressive tax rates which vary between 15% and 35% and are calculated on a cumu­lative basis. The following are the 2016 brackets and relevant income tax rates.

Taxable income Tax rate Tax due Cumulative tax due
First 12,600 15 1,890 1,890
Next 17,400 20 3,480 5,370
Next 80,000 27 21,600 26,970
Above 110,000 35 ­

Remuneration paid by local employers is also subject to a 0.759% stamp duty.

Credits. The minimum living allowance may be claimed as a credit against the tax on employment income. The minimum liv­ing allowance applicable for each month of employment may not exceed 50% of the monthly gross amount of the legal minimum wage that is effective at the beginning of the calendar year in which the wage is earned. The percentage is 10% for a spouse who is unemployed and does not earn income, 7.5% for the first two children and 10% for the third child. The tax credit is calcu­lated by multiplying the total minimum living allowance amount by 15%. However, the credit cannot exceed the total tax calcu­lated on the employment income, and no refund is granted in the event of an excess amount.

The minimum living allowance does not apply to nonresident individuals who derive employment income in Turkey.

Relief for losses. Self-employed individuals engaged in a business or individuals who carry out commercial activities may carry forward business losses for five years. No loss carrybacks are allowed.

Other taxes

Inheritance and gift tax. For 2016, beneficiaries of inheritances and gift recipients are subject to inheritance and gift tax at rates ranging from 1% to 30%. The tax is paid over three years in two equal installments, in May and November. For 2016, inheritances amounting up to TRY170,086 and gifts amounting up to TRY3,918 are exempt from tax. The following are the tax rates.

Tax base:

Exceeding Not exceeding Inheritance
tax rate
tax rate
0 210,000 1 10
210,000 710,000 3 15
710,000 1,820,000 5 20
1,820,000 3,820,000 7 25
3,820,000 10 30


Turkish citizens are subject to inheritance and gift tax on world­wide assets received. Resident foreigners are subject to inheritance and gift tax on worldwide assets received from Turkish citizens and on assets located in Turkey received from resident foreigners or nonresidents. Nonresident foreigners are subject to inheritance and gift tax on assets located in Turkey only.

Motor vehicle tax. The persons in whose names motor vehicles are registered may pay motor vehicle tax for each year in two equal installments in January and July. The amount of tax is determined separately for each group of vehicles by taking into consideration the age and engine capacity of the vehicles.

Real estate tax. Buildings and land in Turkey are subject to real estate tax. The taxpayer is the owner of the building or land, the owner of any usufruct over the building or land, or if neither of these exist, any person that uses the building or land as its owner. A partial exemption of 25% of the tax value is granted for build­ings or apartments used as residences. This partial exemption applies for five years from the year following the year of the completion of construction.

The tax base for the real estate tax is the tax value of the building or land. The tax value is the value recorded at the Land Registry. The rate of building tax is generally 0.2%, but this rate is reduced to 0.1% for buildings used as residences. The rate of land tax is 0.1%, and the rate of parceled land tax is 0.3%. These rates are increased by 100% within the frontiers of a metropolitan munic­ipality and contiguous regions as defined by law.

A declaration is submitted to the municipality where the building or land is located if a modification is made that might lead to a change in the tax value. Taxes are paid annually in two equal installments, the first at any time during the period from March through May and the second in November.

Social security

The Turkish social security system was previously based on three institutions each regulated by its own law. These institutions were the Social Security Institution (for private sector employees), the Pension Fund (for public sector employees) and the Bag-Kur (for self-employed people). Effective from 1 October 2008, the Social Security and General Health Insurance Law No. 5510 unified the prior three social security regimes.

Under the law, all employees of Turkish private entities are sub­ject to a national social insurance system that covers work-related accidents and illness, general social security, disability and death. The law also provides retirement benefits.

Employers and employees pay monthly contributions at varying percentages calculated on gross salary, subject to upper and lower limits stated in the law. For the period of 1 January 2016 through 31 December 2016, the upper limit for monthly salary subject to social security contributions is TRY10,705.50, and the lower limit for monthly salary subject to social security contri­butions is TRY1,647.00. Employees pay contributions at a rate of 14%. Employers pay contributions at a rate of 20.5%. Five percent of the employers’ contribution can be reimbursed by the Republic of Turkey Prime Ministry Undersecretariat of Treasury if certain conditions are fulfilled by the employer. The rates of unemployment insurance premiums are 1% for employees and 2% for employers.

Employees who are subject to social security contributions in their home country may not be subject to social security contributions in Turkey if they prove their social security status by submitting legal documents obtained from the relevant for­eign social security institution.

To provide relief from double social security premiums and to assure benefit coverage, Turkey has entered into bilateral total­ization agreements, the terms of which may differ from agree­ment to agreement, with the following jurisdictions.

Albania                        France                    Netherlands

Austria                         Georgia                  Norway

Azerbaijan                    Germany                Quebec

Belgium                       Guadeloupe           Romania

Bosnia and                   Italy                       Serbia

Herzegovina                 Korea (South)        Slovak Republic

Bulgaria                       Libya                     Slovenia

Canada                         Luxembourg          Sweden

Croatia                         Macedonia             Switzerland

Czech Republic            Montenegro           United Kingdom


Turkey is also a party to the European Social Security Agreement. Article 15-1/a of the agreement contains the following provision:

“Workers employed by a corporation which has a normal employer in one of the contracting states, who are sent to another contracting state for a specific piece of work for the corporation, are subject to the legislation of the state where they were originally employed, provided that the estimated period of employment in that state does not exceed 12 months and that such workers are not sent to replace workers whose periods of employment have ended.

In cases where the work takes longer than 12 months for unforeseen reasons, the employment law of the country of origin will continue to apply until the end of the work, sub­ject to the agreement of the authorities in the country where the work is being carried out.”

Filing and payment procedures

Tax is imposed on a calendar-year basis in Turkey.

Employers must withhold income tax from salaries and wages paid to employees. All withholding taxes must be declared monthly on the 23rd day and paid on the 26th day of the month following the month of payment (in cash or by accrual).

A taxpayer who derives commercial or self-employment income must file and pay advance income tax quarterly. The advance tax amount equals 15% of net income. The advance payments must be made by the 17th day of the second month following the end of the quarterly tax period. Advance tax paid is deducted from the income tax payable in the final tax return.

Annual income tax returns must be submitted to the tax authori­ties between 1 March and 25 March of the following year. The balance of tax due must be paid in two equal installments in March and July.

Nonresidents are generally not required to file income tax returns if they have only earnings subject to withholding tax. Nonresident individuals or Turkish citizens who reside in Turkey with the intention of staying or nonresident individuals who derive income not subject to withholding tax must file annual income tax returns for other sources of earnings, including commercial income. If nonresident individuals having such earnings leave Turkey, they must file an “occasional” tax return 15 days before their departure.

Nonresident individuals who are not required to file an annual income tax return must file a special tax return for certain gains listed in the Income Tax Code. The special tax return must be filed within 15 days following the date on which the gains are derived. For gains related to self-employment earnings, the spe­cial tax return must be filed within 15 days after the ending of the self-employment activities.

Double tax relief and tax treaties

Tax resident individuals may claim a credit for taxes paid abroad on income derived outside Turkey and subject to tax in Turkey. This credit can be applied against the tax payable in Turkey. A foreign tax credit is not available to nonresidents.

The tax amount allowed as a foreign tax credit for a resident is limited to the amount of tax to be paid in Turkey for the same amount of income. Accordingly, if the tax rate applied in the other country is greater than the tax rate applicable in Turkey the difference cannot be considered in calculating the foreign tax credit. The portion of the income tax corresponding to the earn­ings derived in foreign countries is calculated based on the ratio of such income to worldwide income.

To claim the foreign tax credit, both of the following conditions must be satisfied:

  • The tax paid in the foreign country must be a personal tax lev­ied on the basis of income.
  • The payment of the tax in a foreign country must be substanti­ated with documents obtained from competent authorities and attested to by the local Turkish embassy or consulate, or if these institutions do not exist, by similar representatives of Turkey in that country.

Turkey has entered into double tax treaties with the following jurisdictions.

Albania                        Iran                                  Pakistan

Algeria                         Ireland                             Poland

Australia                      Israel                               Portugal

Austria                         Italy                                 Qatar

Azerbaijan                    Japan                               Romania

Bahrain                        Jordan                             Russian

Bangladesh                  Kazakhstan                      Federation

Belarus                         Korea (South)                  Saudi Arabia

Belgium                       Kosovo                            Serbia

Bosnia and                   Kuwait                             Singapore

Herzegovina              Kyrgyzstan                      Slovak Republic

Brazil                           Latvia                              Slovenia

Bulgaria                       Lebanon                          South Africa

Canada                         Lithuania                         Spain

China                           Luxembourg                    Sudan

Croatia                         Macedonia                       Sweden

Czech Republic            Malaysia                          Switzerland

Denmark                      Malta                               Syria

Egypt                           Mexico                            Tajikistan

Estonia                         Moldova                          Thailand

Ethiopia                        Mongolia                         Tunisia

Finland                         Morocco                          Turkmenistan

France                          Netherlands                     Ukraine

Georgia                        New Zealand                   United Arab

Germany                      Northern Cyprus             Emirates

Greece                          (Turkish                          United Kingdom

Hungary                       Republic of)                    United States

India                             Norway                           Uzbekistan

Indonesia                     Oman                              Yemen

Entry visas

Nonresident foreign nationals, who are not exempt from the visa requirements of Turkey under reciprocal agreements, must obtain a visa from the Turkish embassy or the Consulate General in their country before their travel. Exemptions apply for a stay of limited duration (that is, 30 days, 60 days or 90 days, depending on the country of nationality). In addition, foreign nationals from a limited group of countries, who are subject to the visa require­ment, may obtain an e-visa from the online portal of the Turkish government for a stay of limited duration (that is, 30 days, 60 days or 90 days, depending on the country of nationality).

Work permits and resident permits

Under the Law Concerning Work Permits of Expatriates and the Regulation Concerning Work Permits of Expatriates, nonresident expatriates must obtain a work permit and a residence permit to be eligible for employment in Turkey. Work permits are issued by the Ministry of Labor and Social Security. The application for a work permit is filed from abroad with the local Turkish embassy or the Consulate General.

As of 5 January 2016, applications for all types of visas must be made first online at www.visa.gov.tr. This must be followed by the submission of the original documents to the Consulate General at the time of the interview.

All preconditions and required documents are available during the application process.

The new regulation provides the following:

  • All applicants must have medical insurance that will be valid during their stay in Turkey.
  • Following the completion of the application, the applicants must also make their appointment online and submit the origi­nal documents to the Consulate General during the interview.

Expatriates filing from abroad must also apply for an employ­ment (work) visa before their travel. The following are the steps for obtaining a work permit, which also serves as a residence permit:

  • Personal application to the Turkish embassy and/or Consulate General in the home country of the expatriate or where the expatriate legally resides
  • Application to the Ministry of Labor and Social Security in Ankara, Turkey, within 10 days after the date of filing of the application with the Turkish embassy and/or Consulate General
  • Personal application for an employment (work) visa within 90 days after obtaining the work permit from the ministry in order to get the work visa stamp on his or her passport

For the first application for the work permit, unless otherwise provided in a bilateral or multilateral agreements to which Turkey is a party, the work permit is valid for at most one year to work in a certain workplace or enterprise in a certain job. After the duration of one year, the duration of the working permit may be extended up to two years, on the condition of working in the same workplace or enterprise in the same job. At the end of the dura­tion of three years, the duration of the work permit may be extended up to three years, on the condition of working in the same profession and at the disposal of a desired employer. The work permit extension processes must be realized at most 60 days before the expiration date and within 15 days after the expiration date of the valid work permit.

The family of the expatriate may obtain a residence permit for the duration of the expatriate’s employment. Dependents cannot file their applications jointly with the expatriate. They must file their applications following the issuance of the expatriate’s residence permit. The authorities confirm the date for the family’s resi­dency appointment. A particular date or time cannot be requested.

Family and personal considerations

Family members. After a foreign national obtains a residence permit, the spouse and children may apply for their own resi­dence permits.

The working spouse of a foreign national must apply for a sepa­rate work permit. This work permit is granted on the condition that the spouse resided with the foreigner legally and uninterrupt­edly for at least five years. The duration may be shortened or even eliminated under certain conditions.

Marital property regime. The Turkish Civil Code considers the marital property regime to be the statutory regime for manage­ment of marital property. The ordinary marital property regime is participation in the jointly acquired property. Spouses can opt out of the regime by mutual agreement, which must be executed in writing and notarized.

Forced heirship. Turkish succession law provides for forced heir­ship. If a decedent leaves descendants and a surviving spouse, the spouse is entitled to one-quarter of the entire intestate share. Other legal portions range from one-quarter to three-quarters of the forced heir’s intestate share.

Driver’s permits. A new regulation, “The Regulation to amend the Road Traffic Regulation,” announced in the Official Gazette, dated 17 April 2015 and numbered 29329, applies to the issuance of driver’s licenses of foreigners. Foreigners can use their driver’s licenses in Turkey for six months from the date of their first entrance to Turkey. If they want to drive in Turkey for more than six months, they must change their driver’s licenses to Turkish driver’s licenses. A monetary penalty of TRY412,00 applies to each violation of the regulation.

An announcement on the Traffic Registry Directorate website provides details regarding the changing of a foreign driver’s license to a Turkish driver’s license.

Before preparing the required documentation, the foreigner must visit the Traffic Registry Directorate with the original and a translated, notarized copy of his or her driver’s license in order to confirm whether his or her driver’s license can be changed.

The following is the required documentation:

  • Original of the driver’s license and notarized or consulate-approved translation copy
  • Original and the photocopy of identification or passport (for foreigners, original and copy of residence permit)
  • Three to four hard-copy photographs
  • In accordance with the class of the driving license, a health certificate (from the private or official health authorities within the province; must be valid for two years)
  • Blood type approval document
  • Fee receipt according to the class of the driving license (paid to banks and tax offices; the card fee is TRY119)