Turkey: Income Tax Communiqué No: 311 Has Been Published

salary incomes will be declared with annual declaration.

1. In case of income is received from more than one employer, the employee can freely choose which income will be considered as primary.
2. It will be evaluated internally whether the salary income will be declared or not, and in case of other incomes are present, they will not be included in the calculation.
3. In case annual declaration is to be submitted, it is possible for expenses of education, health, donations and charities to be subject to deductions of the declared income.
4. Taxes paid by stoppage can be deducted from income tax calculated over the declaration.
5. Salary income which are not subject to stoppage (excluding other salaries) will be declared as per the 95th article of the same Law, regardless of their amounts.

Status Of The Employee Who Work For More Than One Employer In Private Sector Workplaces

1. In below circumstances, employee is considered as receiving salary from more than one employer:
2. 1. In addition to the wage earned by an employee working alongside a private sector employer during the year, earning salary income from another private employer or public institution or organization.
   2. While working alongside a private sector employer, leaving job and starting to work alongside another private employer or public institution or organization within the same calendar year.
   3. Salary income earned by the employee working alongside income or corporate taxpayers in the same calendar year when they start working within the business partnership or ordinary partnerships which taxpayers are partners of.
3. In case of salary income is received from more than one employer, they will be taxed separately, and salary bases will not be associated with each other. In case of the employee changes employers, salary to be received from the new employer will not be associated with previous salary basis and zero basis will be based on.
4. Below circumstances are considered as employee is receiving income from a single employer:
5. 1. Merger of two separate private sector companies (transfer, type change and separation are included).
   2. Within the scope of the Labor Law numbered 4857, in places where principal employer-subcontractor relationship is applicable, change of subcontractor.
   3. Change of any shareholders in companies operating as partnerships.
6. Salaries that are considered to be received within the same calendar year will be taxed over cumulative basis.
7. Employee, who changes employers within a year, can request cumulative taxation in accordance with tariffs of income tax basis regarding salary income, by notifying the new employer. In case of a liability of declaring income as per cumulative basis of salary income, paid taxes by stoppage can be deducted by considering cumulative basis calculated over declared basis in the annual declaration.

Status Of Those Who Earn Salary Income Within The Scope Of Exception

Salaries paid to personnel working on ships and yachts registered in the Turkish International Ship Registry and salaries paid to R&D, design and support personnel are exempt from income tax. Within the scope of mentioned Laws, income tax deductions are not implemented on the employee salaries. Therefore, it is not possible to declare these fees within the scope of the exemption and to consider in determining whether or not to submit a declaration.

In accordance with the Law on Free Zones, income tax deducted from the employees' salaries who are working in here, R&D, design and support is left to the employer by deducting them from the tax accrued on the submitted withholding declaration.

Due to income tax deductions, it is necessary to consider whether salary payments done to the employee, who is working within this scope and fulfils the terms, shall be subject to declaration submission.

Same application is also valid for income tax exemptions in other Laws as well.

Income Tax Tariff

15% up to 18.000 TL

2.700 TL for 18.000 TL of 40.000 TL, the surplus is 20%

7.100 TL for 40.000 TL of 98.000 TL (7.100 TL for 40.000 TL of 148.000 TL in salary income), the surplus is 27%

22.760 TL for 98.000 TL of 500.000 TL (36.260 TL for 148.000 TL of 500.000 TL in salary income), the surplus is 35%

163.460 TL for 500.000 TL of more than 500.000 TL (159.460 TL for 500.000 TL of more than 500.000 TL in salary income), the surplus is 40%

rates are to be applied.

For the salary income received between the dates of 1/1/2019-31/12/2019, tariff prior to the amendment in 103rd article will be applicable.

Application Of Tariff Amendment

1. A new bracket has been added to the income tax tariff, with the ratio of 40%.
2. For other revenues excluding salary income, the new tariff will be applied to revenues from 1/1/2019. Therefore, revenues included in the income tax declarations of 2019, which are to be submitted in 2020, will be subject to new tariff and ratios.
3. For salary income of 2019 and related income tax declarations to be submitted in 2020, tariff prior to recent Law amendment will be applicable.
4. For salary income received after 1/1/2020, increased revaluation rate of 2019 will be applicable.
5. In case of salary income for 2019 is declared together with other revenues, previous tariff will be valid for salary income only, and for other revenues new tariff will be applicable.

Exemption Regarding the Benefits Provided by Employers to the Employees for Traveling to Workplace

Benefits of public transportation cards, tickets, or payment tools provided by employers to the employees for commuting to workplace have been included within the scope of exemption as of 1/1/2020 with the Law numbered 7194.

Notes regarding the application of the exemption are as below:

1. In order to benefit from the exemption below preconditions are required:
2. 1. Not providing transport services by the employer in terms of provision of transportation vehicles or purchasing services in order to ensure that the employees go to the workplaces collectively.
   2. Transportation cards, tickets or payment tools for this purpose are valid in public transportation vehicles to be used for transportation to work (The use of payment instruments, which can also be used for other purposes where the amount charged for the transportation fee is restricted to be used only in transportation, is not considered as a violation of this condition.)
   3. Limiting the payments with actual working days.
   4. Transportation fee does not exceed the daily determined amount (12 TL for 2020),
   5. Documenting the payments for public transportation cards, tickets or payment tools.
3. The exemption will be inapplicable for the circumstances below:
4. 1. Cash payments of transportation fee,
   2. Providing transportation costs in the form of payment instruments that can be used in other purchases besides gift cards and similar transportation expenditures,
   3. Provision of a vehicle,
   4. Payment of transportation fee for non-working days,
   5. In addition to transportation service, providing public transportation card, ticket or payment tools used for the same purpose.

   In case of aforementioned circumstances are present, exemptions will not be applicable, payments and benefits will be considered as net salary, will be grossed up and be subject to income tax.

5. Transportation fee payments made by the employer as lump sum for more than one month, the amount corresponding to each month will be evaluated separately within the scope of the exemption.
6. It is possible for the employers to make corrections in the relevant month for the payment of the transportation expenses made in advance in the related month and subject to the exemption for the days when the employee does not work due to leave, report and similar reasons, or to be deducted from the transportation expense payments of the following month.
7. Tax exempted portion of the benefits of public transportation cards, tickets, or payment tools provided by employers to the employees for traveling to workplace are required to be indicated in the salary payroll as well.
8. Value added tax is excluded from the daily transportation fee (12 TL for 2020) provided by the employers as benefits of public transportation cards, tickets, or payment tools provided. Undertaken value added tax which corresponds to exempted portion of the transportation fee can be deducted by the employers.
9. In case of the employers pay more than the exemption amount, the portion exceeding the amount (including the value added tax that corresponds to the part exceeding the exemption amount) will be accepted as net paid and will be subject to income tax stoppage by being grossed up. On the other hand, VAT, which is falls under the part exceeding the exemption amount and accepted as a fee, will not be subject to discount.

Exception in Fees Paid to Referees Managing Amateur Sports Competitions

With the amendment, the fees charged by the sports referees who manage professional sports competitions and the sports referees who manage the competitions in the top leagues of basketball and volleyball sports are excluded from the scope of the exception.

Taxation of Salaries and Payments Which Are Considered as Salaries for Athletes

With the Law No. 7194, the application period of the provisional article 72, which determines the rates and taxation of the income tax stoppage of the payments made to the athletes, was extended until 31/12/2023.

Also, the rate of 15%, has been set as 20% in the related article.

Provisions of this Communiqué will be effective as of publishing date.

You can access Revenue Administration's Communiqué no: 311 from the link below:

Revenue Administration's Communiqué no: 311