Turkey

Click to download PDF: As per 1 January 20152016, 2017

EXPATRIATE AND EMPLOYER TAX COMPLIANCE AND ADVISORY
Tax rate Progressive income tax tariff is applied ranging between 15% – 35%.
Tax period Calendar year.
Tax residency / Domicile according to domestic law Turkish citizen.
Domicile in Turkey or habitual place of residency in Turkey.
Present for more than 180 days (6 months) in a calendar year in Turkey.
If the presence in Turkey is based on a well defined and temporary job, duty, education, medical treatment, vacation or other reasons to stay in the country without the intention of residing, no tax residency will be in question. The expatriate with a well defined and a temporary role in Turkey will only be subject to Turkish tax over his/her Turkey sourced income.
Tax registration Individuals are being registered through their employees if their only income is salary income.
Employment income definition Salary and wages are defined as money and goods given as compensation to employees in association with a specific place of business as well as benefits that are provided to them and can be represented in terms of money.
Examples of tax exemption Mandatory social security contributions paid by employees.
Meal costs, child relief etc. up to amount determined by legislation.
Severance payment for dismissal and retirement. (under certain conditions in the limited amount)
Minimum living allowance calculated in accordance with marital status and number of childs.
Private health insurance and private pension for employees paid by the employer (under certain conditions in the limited amount)
Specific expatriate concession Not applicable.
Income of board members Treated as employment income.
Tax returns The income tax on salaries are being declared by the employers on a monthlly basis. Monthly declarations can be done on quarterly basis if the number of employees is less than 10. In case of any income other than salary income, individuals may need to file an income tax declaration on a yearly basis.
Tax payments The income tax on salaries are being declared by the employers on a monthly basis to be paid on 26th of the following month.
TAX TREATIES
Employment income / income from board members Art 15/16 OECD Model Tax Convention.
INTERNATIONAL SOCIAL SECURITY
Cross border employments If a Turkish company employs a foreign individual who has citizenship from the countries signed double social security treaty with Turkey, social security obligations are fulfilled in accordance with articles of the treaty. If no treaty signed between the countries social security contributions are paid according to local legislation.
Exception under Art 16 of Reg. 883/2004
and Art 17 of Reg. 1408/71
Not applicable.
Social Security Cost as % from gross salary and absolute amounts Short – term risks: 2% (thereof payable by employee: 0%)
Long – term risks: %20 (thereof payable by employee: 9%)
General health insurance: 12,50% (thereof payable by employee: 5%)
Unemployment insurance: 3% (thereof payable by employee: 1%)
The calculation of contributions have a  limit of gross salary 13.331,40 TRL (2017)
IMMIGRATION
Work permit Foreign nationals are required work permit to work in Turkey. The work permit is granted for maximum 1 (one) year and can be extended for another year. The residence permit is provided with the work permit at the same time.
Visa The list of citizens of countries who are allowed to enter Turkey wihout visa is available at: http://www.mfa.gov.tr/visa-information-for-foreigners.en.mfa
The visa conditions and online visa application is avaliable at: https://www.evisa.gov.tr/en/
Staying in Turkey for turistic purposes is limited with 90 days.
Residency permits / registration certificate Valid working permit is used as residence permit. On the other hand “Work Permit Exemption Certificates” are also used as residence permit.
Driving license The international driving licenses issued in the foreign countries are valid in Turkey. The foreign nationals may also obtain the Turkish driving license according to the procedure provided by the local laws.
STOCK OPTION PLAN It is treated as employment income and there is no tax exemption.
Taylan Baykut
Head of AOS-Partner, Istanbul, Turkey
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