Turkey: Thinking Beyond Borders

Last Updated: 1 August 2016
Article by KPMG Turkey

An individual's liability to income tax in Turkey is determined by residency status for taxation purposes and the source as well as the type of income derived by the individual. Income tax is levied at progressive tax rates on an individual's taxable income for the calendar year – which is the taxation period in Turkey.


Determination of residency status is the key point in providing tailored tax advice for business travellers as well as the international assignees in respect to income tax liabilities. However, any duration of stay for business purposes less than 6 months in a calendar year is likely to be considered as ''short-term'' and the individual would be regarded as ''limited taxpayer'' as soon as the certain circumstances are met.



Any individual is regarded as a tax resident in Turkey who is liable to pay taxes on his/her worldwide income as being full tax payer where one of the below given criteria is met based on the Turkish Income Tax Code;

  • Staying more than 6 months in a continuous period during a calendar year in Turkey, (temporary leaves does not counted as interruption for the residency)
  • Being ''domiciled'' within the Turkish boundaries. The term domiciled here refers to be registered in Turkish address registration system (for a Turkish citizen) and holding a work & residence permit (for an expatriate)

On the other hand, fulfilment of one of the above mentioned criteria is not necessarily adequate to conclude that an individual is tax resident in Turkey since the provisions of Prevention of Double Taxation Treaties that regulates the residency shall also be checked to comply with the bilateral agreement rules which is crucial for mobile employees to benefit from the treaty conditions.

Liability for income tax

Resident tax payers are liable to pay taxes on their worldwide income whereas the non-resident tax payers are only subject to taxation on their Turkish source of income.

Turkish source of income refers to fulfilment of any of the below;

  • Remuneration received for services rendered in Turkey for an entity in operating Turkey,
  • Remuneration received for services rendered for an entity operating in Turkey,
  • Remuneration received for services rendered to Turkish entity,
  • Earnings generated from movable & immovable properties in Turkish boundaries.

Tax trigger points

Technically, there is no threshold/minimum number of days that exempts the employee from the requirements to report and pay income taxes in Turkey. In accordance with OECD principles, in case an economic employer is in Turkey, then the employee will be subject to withholding taxes at progressive rates regardless of his/her residency status.

For the case where the economic employer is not in Turkey, then the residency status as well as the income types of the individual will determine the taxation requirement to be fulfilled via annual income tax return.

Types of taxable income

Extended business travellers are generally subject to taxation on their employment income as well as other Turkish sourced income items such as income derived by the rental or sales of an immovable property.


For employment income:

Taxable Income Bracket Tax Rate
From To Percent
1 12,000 15
12,001 29,000 20
29,001 106,000 27
1076,001 over 35

For other income types:

Taxable Income Bracket Tax Rate
From To Percent
1 12,000 15
12,001 29,000 20
29,001 66,000 27
66,001 over 35


Liability for social security

Any individual who is resident in Turkey needs to contribute to the Turkish Social Security Scheme unless there is a totalization agreement between Turkey and the employee's home country so that the employee is covered under his/her home country social security scheme during the assignment period in Turkey.

Employees, that are performing dependent personal services, are not responsible to take any action for contributing to the Turkish Social Security System since the employers are responsible for all registration and required monthly reporting procedures.

Employment insurance

Employees' social security portion is %15 whereas the employer portion is %22, 5 (including unemployment). However, social security contributions are capped at the following amount for the 2nd period of 2015 which is updated by the end of the each calendar year: 8.277,90


Employee compliance obligations

Individuals who have a filing requirement of annual income tax return shall submit their returns between 1-25 March in the subsequent year of the taxation year, which is the calendar year.

Employer reporting and withholding requirements

Withholding taxes can be classified into two groups; namely employee wage withholding taxes and other withholding taxes.

Employers in Turkey are required to process the wage payments through payroll and apply withholding taxes on the wage payments on behalf of the employees. The employers are liable against the tax office with respect to the correct calculation, filing and payment withholding taxes on employee payments. Wage income is taxed on a progressive rate basis at rates varying from 15% to 35%.

Other than the employee wage withholding taxes, withholding is applied on payments such as certain payments to non-residents, professional service fees, dividends and rent, made to persons listed in the relevant tax codes.

The withholding taxes are reported through monthly withholding tax returns by the employers until the 23rd of the following month and the taxes are payable until the 26th of the same month.


Work permit / Visa requirements

Immigration process to Turkey depends on the intended duration of stay and purpose. Basically, there are 2 types of visas; short-term and long-term in terms of business & working purposes.

1. Short Term Visa Holders

Permissible Activities for foreigners holding a Business Visa and Assembly Visa

1.1 Permissible activities for Business Visa holders;

  • Attending meetings & conferences with colleagues clients or customers,
  • Participating in training programmes- Developing business contacts
  • Advertising and Market research
  • Collecting data, reviewing work related issues.

Visas for business meeting/conference can be obtained via the Electronic Visa Application System (www.evisa.gov.tr)

1.2 Permissible activities for Assembly Visa (Maintenance & Installation Work Visa) holders;

  • Short term purpose of stay such as the maintenance, installation or repair of a machinery etc. where the total duration of stay will not exceed 90 days in a period of 12 months.

Important notes for foreigners holding a Business Visa & Assembly Visa

  • Regardless of the visa application type, applicants need to obtain their visa from Turkish Embassy/Consulate prior to their intended travel date. These visa types are generally obtained within 2 working days depending on the country of residence and completeness of the appropriate application documents.
  • Multiple entry assembly visa can only be granted once in a 12 months period following the individual's first entry and total days of stay in Turkey cannot exceed 90 days. The holders of assembly visa & business visa are not requested to apply for work or residence permit. They are also exempted from such obligatory social security payments from both the employer's & employee's side. Therefore, these visa types are relatively advantageous for short term works.
  • It is important that the current passport of the individual foreigners wishing to enter Turkey should carry a passport with an expiration date at least 60 days beyond the "duration of stay" of their visa, e-Visa, visa exemption, or work permit.
  • Individuals have to return to their home countries before the expiration date of their visa and apply for the work permit for any purpose of stay more than the obtained short term visa period.

2. Long-Term Visa (Work Permit)

In case the intended work or business in Turkey exceeds 90 days in a 12 months period, the necessary action will be applying for a work permit from the home country and obtain initial work visa from the nearest Turkish Embassy/Consulate which is the first step to be taken to be granted with a work permit. The Turkish employer or its legal representative will then be obliged to realize the work permit application to the Ministry of Labour and Social Security within 10 days following the issuance of the work visa. The Ministry of Labour will then evaluate the submitted work permit application within approximately 30 days.

Important notes for foreigners holding a Work Permit

  • Unless otherwise provided in the bilateral or multi-lateral agreements to which Turkey is a party, working permission for a definite period of time is given to be valid for at most one year for first time applicants.
  • Taking into consideration the situation in the business market, developments in the labour life, sectorial and economic conjuncture changes regarding employment, according to the duration of residence permit of the foreigner and the duration of the service contract or the work, to work in a certain workplace or enterprise and in a certain job; The Ministry of Labour and Social Security may extend or narrow down the area of validity of the work permit in accordance with its evaluations.
  • Legal dependents of work permit holders are eligible for obtaining dependent residence permit.


Double taxation treaties

Turkey has double taxation treaties that are in force with 80 countries and more treaties are expected to be in force in the next years to tighten the international cooperation for prevention of double taxation as well as the fiscal evasion.

Permanent establishment implications

There is potential that a permanent establishment (PE) could be created as a result of extended business travel, but this would be dependent on the type of services performed, the level of authority the employee has and the duration of stay in Turkey for those services.

Indirect taxes

The deliveries of goods and services are subject to VAT in Turkey. The standard VAT rate is 18%, while reduced rates of 8% (for basic food stuff, textile products etc.) and 1% (for certain agricultural products, financial leasing services etc.) are defined for the deliveries of specific goods and services.

Transfer pricing

With respect to transfer pricing, Turkey applies the widely recognized OECD principles. Transfer pricing issues could arise if, for example, an employee provides a service for the benefit of an entity in one jurisdiction while the respective costs are borne by the entity in a different jurisdiction. The possible consequences and remedies to such situations depend on the nature and complexity of the services performed.

Local data privacy requirements

Turkey has personal data privacy laws.

Exchange control

Following the recent changes in the local regulations, exchange control practices are generally in line with the EU norms. Suspicious financial interactions and/or high amounts of money transfer (either in cash or in online form) are subject to investigation in accordance with the requirements of EU Money Laundering Directives.

Furthermore, in case an amount of 25.000 or 10.000 € or equivalent of other currency will be carried out of the Turkish borders, there will be a reporting requirement in the customs and certain restrictions can be applied by the Ministry of Finance.

Non-deductible costs for assignees

Non-resident individuals are not allowed for foreign tax credit system for the income tax due in Turkey. Furthermore, there are certain items that cannot be deducted from the tax liability of an individual depending on the income type and amount.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions