Accounting and tax 2021

Turkey corporate tax obligations Tax planning in Turkey is relatively straightforward compared with most jurisdictions, as it is a jurisdiction with relatively simple tax laws.

  1. The corporate tax rate is 20 percent. A resident company is liable to corporate income tax on its worldwide income. A non-resident company is liable to corporate income tax on its Turkish-source income only;
  2. Capital gains of resident individuals are taxed as ordinary income. Non-Turkish investment income is taxable in Turkey, if the individual is resident in a calendar year;
  3. Capital gains of resident individuals are taxed as ordinary income. Non-Turkish investment income is taxable in Turkey, if the individual is resident in a calendar year;
  4. Dividends received from resident subsidiaries are exempt from withholding taxes in Turkey. Dividends received from non-resident subsidiaries may be exempt under certain conditions;
  5. The standard VAT rate is 18%, and the reduced rates are 8 and 1%. The reduced applies on capital goods built to improve infrastructure in sectors of need, as determined by the Turkish government;
  6. Incentives such as reduced rate on corporate tax, VAT, Customs duty, Social security, Income tax are available for approved investments in Turkey;
  7. Turkey boasts 76 taxation treaties, minimizing withholding tax on funds transfers between any participating countries;
  8. Personal income tax ranges from 20-35% on income from 5300-30,000 USD and remains at 35% for over 30,000;
  9. Entities quoted on the Capital Markets Board must be audited by an independent audit company and prepare an ‘Independent Audit Report’ on a half-yearly basis. The total period an independent auditor can audit a quoted entity is seven successive years (this rule is not applied for those audit firms meeting specified criteria);
  10. Healy Consultants Compliance Department assists our Clients to efficiently and completely discharge the annual accounting and auditing obligations of their Turkey company through the following: i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparation of financial accounting records and iv) preparing forecasts, budgets and sensitivity analysis to better manage financial obligations and ease the process of reporting to the Turkey accounting authorities;
  11. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

Legal and compliance

Healy Consultants Compliance Department assists our Clients efficiently and completely discharge their Turkey legal and tax obligations.

  1. According to the Companies Act, a Turkey company must have at least one director and one shareholder of any nationality;
  2. The Memorandum of Association is a contract between the shareholders and comprises i) company activities ii) registered office address iii) shareholder and director details iv) share capital v) profit distribution method;
  3. Every company must lodge an annual return confirming relevant details of the company for the public register including names and addresses of all directors, address of principal place of business and details of shareholders and their shareholdings. A company is exempt from this obligation if there have been no relevant accounting transactions in the financial year;
  4. Annual audited financial statements must be submitted to the Turkish Trade Registry. Healy Consultants assists our Clients efficiently and effectively complete this annual statutory obligation;
  5. A private Turkey company is required to maintain both a local registered address and a local resident company secretary;
  6. Company information such as capital structure and shareholder and director details for a Turkey offshore company do not need to be made public;
  7. Each company must have a registered office in Turkey. Healy Consultants can provide this for monthly fee of €1,450;
  8. All business activities conducted in Turkey receive government approvals and permits and licenses;
  9. When employing local or foreign workers, employers must make sure to stay compliant with the Employment & Labour Law, the main set of laws governing labour in Turkey. The current labour laws most resemble the English system of labour laws, in terms of employer responsibilities;
  10. Employers in Turkey are required to contribute towards their employees Social Security Account, at a rate of 19.5% of the employees gross salary;
  11. The maximum working week in Turkey is 45 hours for all employees and a maximum of 3 hours overtime a day;
  12. A Turkey company can hire EU citizens without them acquiring a work permit visa according to the European Free Movement Law. However, non EU citizens much acquire a work permit visa to work in Turkey;
  13. When incorporating in Turkey, a license is required for all business activities. Healy Consultants can assist our Client in determining what operating licenses are required for their company.

Contact us

For additional information on our accounting and legal services in Turkey, please contact our in-house country expert, Mr. Petar Chakarov, directly:
client relationship officer - Petar
  • Mr. Petar Chakarov
  • Client Engagements Manager
  • Contact me!
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