Today, sports such as basketball, volleyball and tennis and, especially, football, have become an industry, as well as being a branch of the sports industry. Large sums of money spent on sports competitions, players, jerseys, sponsorships and a large audience are proof of this.

Many incentives and privileges have been provided from past to present for the development of sports and athletes, which hold an important place, both in our country, and in the world. However, through Law No. 7194 on Digital Service Tax and Amendment of Certain Laws and Law Decree No. 375, published in the Official Gazette on 07.12.2019 ("Law No. 7194"), some limitations were imposed on the tax incentives provided to sportspersons. Detailed explanations regarding these changes are included in the Income Tax General Communiqué under Serial No. 311, published in the Official Gazette on 27.05.2020.

Through the regulations made in Law No. 7194 and Income Tax Law No. 193 ("ITL"), the withholding rate of the wages, and wages earned by the sportspersons in the top leagues in sports branches subject to the league procedures, were increased from 15% to 20%. On the other hand, there has been no change in the withholding rates for payments made to other sportspersons. In addition to the amendment on the withholding tax rate, through Law No. 7194, the practice of declaring the wages of sportspersons exceeding a certain amount through an annual income tax return has been introduced.

Evaluation of Payments Made to Sportspersons within the Scope of Fee

In Article 61 of the ITL, wage income is defined as the monetary benefit that is provided, and in kind. and may be represented by monies provided for services to employees, subject to an employer, and connected to a specific workplace. Additionally, it is stated that paying wages under the names of appropriation, indemnity, cash indemnity (financial liability indemnity), allocation, increase, advance, dues, attendance fee, premium, bonus, expense provision, or other names, or determining wages as a certain percentage of the earnings, provided that it does not qualify as a partnership relationship, will not change the nature of the wages.

In the aforementioned Article, it states that the transfer fee or other payments made to the sportsperson, and the benefits provided, are also within the scope of the fee. Therefore, the monthly salary, achievement premium, per-game fee, signature fee, image right and other benefits made to sportspersons, and benefits provided by giving real estate or vehicles, housing, and other benefits, are also taxed as wages1.

Withholding Application in Wage Payments to Sportspersons

Although payments made to the sportsperson are considered as "wages" as stated, above, they are subject to a different taxation regime than other wage taxes. As per Provisional Article 72 of the ITL, wage payments made to sportspersons are excluded from the progressive rate tariff; a fixed tax rate is applied to these payments.

Through Law No. 7194, the application period of Provisional Article 72 of the ITL, which determines the withholding rates and taxation of income tax to be made from wages, and payments deemed to be wages to sportspersons until 31.12.2023, and the withholding rate, has increased from 15% to 20% in the payments made to the top league players in sports branches subject to the league procedures. According to these changes mentioned, above, from 01.01.2020 onwards, the following income taxes will be deducted from the salary and any payment that qualifies as a salary, from the participants of sport branches that follow the league manner:

  • 20% from the participants of the first league;
  • 10% from the participants of the second league;
  • 5% from the participants of other level leagues; and
  • 5% from the payments of the participants of sport branches that do not follow the league manner, and the payments of the national sportspersons for taking part in international competitions.

The Situation in Contracts Concluded Before 01.11.2019 and After 01.11.2019

The date 01.11.2019 has critical importance in terms of the amendments made by Law No. 7194. In the changes made regarding the withholding rate, sportsperson contracts issued before 01.11.2019, and which became valid, were excluded from the scope; namely, (i) income tax withholding to be made in wage payments made as of 01.01.2020 based on athlete contracts that have been concluded and became valid after 01.11.2019, or (ii) signed before 01.11.2019 for reasons such as extension of time or changes affecting the 20% fee rate is applied.

Until the termination of the contracts, which were concluded and became valid before 01.11.2019, and did not make any changes affecting the fee or extension after this date, the rate of 15% continues to be applied in the withholdings to be made in the wage payments made based on these contracts.

Declaration of Wage Payments to Sportspersons and Deductions

Another important change made by Law No. 7194 concerns the declaration of sportspersons' fees exceeding a certain amount in an annual return. Through the regulation, it was ensured for the first time that the wages of sportspersons exceeding a certain amount are declared through an annual income tax return. In accordance with the aforementioned amendment, if the sum of the wages earned by the sportsperson after 01.01.2020 exceeds the amount in the fourth tranche of the tariff written in Article 103 of ITL (TL 600.000 for the year 2020), these revenues are declared through an annual declaration.

However, if an annual declaration is submitted, the income tax calculated on these declared incomes may be deducted from the income tax calculated in accordance with the Income Tax Office, provided that it has been paid to the tax office by those responsible for withholding. It should be underlined that taxes deducted according to the ITL may only be deducted from the income taxes calculated through the annual income tax return of the sportspersons, provided that they are deposited with the tax office by the club where the sportspersons work.

Since the regulation in question entered into force as of 01.01.2020, it will not be possible for sportspersons to submit a declaration if their wage income in 2019 exceeds the specified limit. In other words, the practice of making annual declarations of the athletes will be valid for wages earned as of 01.01.2020.

Declaration and Payment Period for Wage Payments to Sportspersons

As explained in detail in the previous title, the declaration application regarding the wages received by the athletes is related to the fees within the scope of the contracts signed after 01.11.2019.

Annual income tax returns are submitted from the beginning of March to the evening of the last day of the year following the relevant accounting period. In this case, 1 March 2021 is the beginning of the annual reporting period following the end of the calendar year for the revenues obtained in 2020. The declared tax may be paid in two installments: The first installment may be paid by the end of March; and the second installment by the end of July2.


Through the amendments made by Law No. 7194, the tax burden of sportspersons working in the top league clubs has increased. Through the declaration of sportspersons' wages exceeding a certain amount in an annual income tax return, the total income included in the declaration was taxed at high rates in the tax tariff. In this context, the amendments made through Law No. 7194 and the secondary regulations are of great importance, especially for the players in the upper leagues and the clubs where these players work, the withholding rate to be made, the declaration to be submitted for the year 2020, and the offsetting process should be carefully considered.


1. Kahraman, Abdülkadir: "Transferin Parlayan Yıldızı: Vergi", Ekonomist, August, 2020, (Access date: 11.09.2020).

2. Revenue Administration, Tax Calendar for 2020, (Access date: 15.09.2020).

Originally published September 2020

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.