Accounting and tax in Turkey

TMF Group Turkey offers a range of accounting and tax services. If you are thinking to start a business or even expand your business into Turkey, these are the services that we normally provide:

Administrative and Accounting Management

  • Bookkeeping in accordance with Turkish statutory requirements
  • Management reporting per corporate reporting guidelines
  • Assistance with selecting the most suitable financial software program
  • Chart of accounts set-up
  • Services related to fixed assets and inventory (count, recording and reporting)
  • Budget preparation
  • Provision of temporary staffing for accounting and administrative support

Tax Return Preparation Services

  • Preparation of tax returns (including corporation tax, provisional income tax, withholding tax, VAT, stamp duty, etc.)
  • Filing (presenting tax returns to the tax office in person)
  • Follow up of timely and accurate tax payment
  • Tax calendar for planning your company's tax-related activities

Other Accounting Services

We also provide assistance with the preparation of financial statements for audits, reviews and compilations. We can save you time by helping you to be completely prepared (e.g. books closed, supporting schedules prepared, accounting issues addressed, footnotes drafted) for periodic outside financial statement reviews.

Tax Implications

VAT & Sales Tax

  • VAT is levied on the supply of goods and on the provision of services
  • The standard VAT rate is 18%

A reduced rate of 8% is applicable to basic foodstuffs and pharmaceutical products

A reduced rate of 1% is levied on journals, newspapers, certain farm products and certain machines or equipment acquired under the Financial Leasing Law

A reverse-charge VAT at 18% is applicable to payments made to non-residents for professional services, and for use and sale of intangibles such as royalties and licenses.

Withholding Tax

  • Dividends: Paid to a non-resident are subject to a withholding tax of 15%, unless reduced under a tax treaty
  • Interest: Paid to a non-resident is subject to a withholding tax of 10%. No withholding tax is levied on payment of interest to a foreign state, international institution, foreign bank or foreign corporation that qualifies as a financial entity
  • Royalties: Subject to a withholding tax of 20%, unless reduced under a tax treaty
  • Technical service fees: Subject to a withholding tax of 20%

Branch remittance tax: A 15% withholding tax is imposed on the after-tax profits of a branch remitted to the head office

Corporate Income Tax

  • The standard corporate income tax rate is 20%
  • A reduction of up to 90% of the corporate income tax can be obtained on earnings derived from investments in specified sectors, regions or cities

Companies conducting research and development (R&D) activities between 1 April 2008 and 31 December 2023 can reduce their taxable income by 100% of R&D expenditure

Individual income tax

An individual's annual net earnings and revenues are subject to individual income tax, which varies from 15% to 35%.

Tax incentives

Since 1st January 2012, the investment incentives system has been comprised of four different schemes. Local and foreign investors have equal access to:

  • General Investment Incentives Scheme
  • Regional Investment Incentives Scheme
  • Large-Scale Investment Incentives Scheme
  • Strategic Investment Incentives Scheme

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