BEING LIABLE FOR TAXATION IN TURKEY AS A FOREIGNER

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Before getting started to our article, we would like to give you some brief information about the taxation system in Turkey. Basically, income taxes are explained in 2 major topics by Turkish Tax Legislation:

  • Personal Income Tax
  • Corporation Income Tax

The individuals are liable of Personal Income Tax. As per Tax Legislation, income is defined as the sum of individual’s revenue and earnings per calendar year. Turkish Income Tax Law considered below stated factors within the calculation of “income tax”:

  • Commercial earnings
  • Agricultural earnings
  • Salary and Wages
  • Professional/ self-employed earnings
  • Income from immovable properties
  • Income from movable capitals
  • Miscellaneous earnings

If you are working in Turkey as a foreigner, you will generally be liable for taxation regardless being considered as resident or non-resident in Turkey. Having said that, residency criterion has crucial point when it comes to determining tax liabilities of individual foreigners: If you are considered as resident –if your domicile is in Turkey-, taxation will be applicable to your world-wide income which also be named as “unlimited liability”. In conclusion, you will be treated as a full tax payer.

We assume you are wondering how is it possible to determine the residency which may not be easy to do sometimes. Even if you do not have a domicile but you reside in Turkey more than 6 months in one year, you will be assumed as a resident in Turkey. However, it is also possible to prove that you are staying in Turkey for 6 months or more per year for a particular reason such as business, you will be distinguished and won’t be treated as resident and unlimited tax liability won’t be applicable for you. For more info on the matter, you can read: http://www.acacia-int.com/time-now-invest-turkey/

On the other hand, if you are assumed as a non-resident you will only be liable of taxation on your income which is arising in Turkey and you will be treated as a limited taxpayer.

Turkey is counted as one of the most competitive countries regarding the sales tax rate between OECD (organization for economic cooperation and development) countries. Turkish Tax Regulations are intelligible and comprehensible by containing objective and beseem to international standards.

If you are a foreigner worker in Turkey, regardless being a resident or non-resident in Turkey, please bear that you will generally be liable for taxation. However the crucial point is, taxation for foreigners divide into two as per Turkish Tax Law: you can either be a full tax payer or limited tax payer. This article aims to provide you with some further information about these two.