Consumption taxes

Nature of the tax

KDV: Katki Deger Vergisi (= Value added tax)

Tax rate

Standard rate of 18%.

Reduced tax rate

There are reduced rates of 8% which is applicable to basic foodstuff, pharmaceutical products and other items; and 1% for journals, newspapers, certain farm products. Also, certain supplies are VAT exempt in Turkey.

Other consumption taxes

OTV (Özel Tüketim Vergisi = Special consumption tax) concerns petroleum products, vehicles, tobacco, alcohol, sodas and luxury products.

Corporate taxes

Tax rate

Tax rate for foreign companies

Turkish companies are taxed on their global income, while companies whose headquarters and "effective management" are abroad are only taxed on their income in Turkey. For additional information access the Invest in Turkey website (in english).

Capital gains taxation

Long term capital gains are taxed in Turkey at the normal corporate income tax rate.

Main allowable deductions and tax credit

40% of expenses for research and development inside a company are deductible from the tax base. For further details on company tax deduction, consult the Revenue Administration.

Other corporate taxes

For further information on company other taxes, consult the Revenue Administration.

Individual taxes

Tax rate

Allowable deductions and tax credit

The set annual deduction must not go over 35% of the salary. There are other deductions which depend on each person's status (marriage, dependent children, etc.).

Special expatriate tax regime

There is no specific additional tax for expats, but an equal treatment between locals and expats.

Double taxation treaties

Countries with whom a double taxation treaty have been signed

YASED

Withholding taxes

Dividends: 15%, Interest: 0% for "financial entities" / 10% (interest on loan for nonresidents), Royalties: 20%

Bilateral agreement

Sources of fiscal information

Tax Authorities

Fiscal administration

Other domestic resources

Inland Revenue Administration