Investing in Turkey

December 6th, 2014

Turkish direct taxation system consists of two main taxes; income tax and corporate tax. An individual is subject to the income tax on his income and earnings, in contrast to a company, which is subject to corporate tax on its income and earnings. The rules of taxation for individual income and earnings are provided in the Income Tax Law 1960 (ITL). Likewise, the rules concerning the taxation of corporations are contained in the Corporation Tax Law 1949 (CTL). Despite the fact that each is governed by a different legislation, many rules and provisions of the Income Tax Law also apply to corporations, especially, in terms of income elements and determination of net income.

Corporate income tax is applied at 20 % rate on the corporate earnings.
Taxpayers (only for income from commercial activities and agriculture in limited tax liability cases) pay provisional tax at the rate of corporate tax; these payments are deducted from corporate tax of current period.
In Turkey, there are several indirect taxes as well. But most important indirect tax is V.A.T.

(The standard rate of VAT on taxable transactions is 18 %.)
The other indirect taxes are; Stamp tax, motor vehicle tax, banking and insurance transactions tax (BITT), inheritance and gift tax, property taxes, communication tax and special Consumption Tax.
HSBC Premier-Investing in Turkey

“This section is intended as a general guide for reference only. The information contained in this section should not be relied upon as a substitute for professional advice in individual cases. Future changes in legislation, tax levels and practice could affect the information on this site. The information shown is based on date or information obtained from sources believed to be reliable, but HSBC Bank A.S. makes no representation and accepts no responsibility as to its accuracy or completeness, and will not be held liable for damages arising out of any person’s reliance upon this information.”

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