Turkish Tax System - Letting Properties
Rental income is
liable for tax assessment in Turkey and this will be enforced by the
Ministry of Finance and Revenue Administration from 2006 and onwards.
Turkish Tax System
The Turkish tax
regime is an important part of the
and can be divided into 3 main categories:
Income Taxes, such
as Individual Income Tax and Corporate Income Tax.
Expenditure, such as Value Added Tax or Banking and Insurance
Transaction Tax or Stamp Tax.
Taxes on Wealth,
such as Property Tax or Inheritance and Gift Tax.
Income taxes in
are levied upon the income, both domestic and foreign, of individuals
and corporations resident in
Non-residents earning income in
through employment, ownership of property, carrying on a business or
other activities providing an income are also subject to taxation, but
only on their income derived in
Individual Income Tax
The limited tax
liability covers trade or business income from a permanent
establishment, salaries for work done in
(regardless of where paid or whether or not remitted to
rental income from real property in
Turkish derived interest, and income from the sale of patents,
copyrights and similar intangible assets.
income tax rate varies from 15% to 40%.
Turkish Tax System in English
Written declaration forms in Turkish
Double taxation agreement between the UK and
Double taxation agreements (UK)
is liable for tax assessment in Turkey and anyone owning real estate in
Turkey who rents it out must declare it at a tax office to become a tax
Those who have
already declared and paid taxes in their own country according to the
double tax agreement will have to prove this with receipts at the tax
offices in order to avoid double taxation. However, the Ministry of
Finance of Turkey conditions that tax payments will have to be made in
Turkey where the real estate is registered and located to avoid legal
and financial difficulties in future. Those who already paid the taxes
in Turkey would need to get the receipts to be stamped by the nearest
Regarding the real
estate rental income made in Turkey, each property owner will have to
submit a written declaration (beyanname)
at the tax office through an accountant if the net income exceeds 2,000
YTL . To find the declaration form please click this link below:
An example of how rental income is taxed:
YTL (for 2006 fiscal year- 2.000 YTL for 2005 – 1.800 YTL for 2004).
allowed (maintenance, repairs etc.): 25% out of the total gross income.
20% (for 2006)
taxed out of the balance 5.500 YTL
The amount to be
taxed 1.100 YTL (equal to GBP 400. 1 GBP = 2.75 YTL)
For more details
about the ratio under “personal income tax”:
Buying Property in Turkey - Taxes and compulsory insurance
calculations please consult with your accountant. One of the leading
accountants in Kalkan is Mr. Ali Tunc. Email:
0090 242 8443266.
Lawyer: Alpaslan Gunal
Office Tel: 0090 2428442977
Mobile: 0090 5052343878
The average amount
charged for each year of accountancy is GBP 100 or 2.750 YTL. One must
obtain a tax number and register as a taxpayer at the nearest tax
office. Your accountant can do this for you.
will have to be submitted and the taxes will have to paid every year in
List of the
UK's double taxation agreements
9.16 Countries with which the UK has double taxation agreements in force
covering taxes on income and/or capital gains (other than limited
agreements concerned solely with air transport and shipping) at October
1999 were as follows, (this is where Turkey is listed)
Rent from overseas property.
Residents of the UK who are ordinarily resident and domiciled
in the UK Residents of the UK who are not domiciled in the UK, or are
Commonwealth or Republic of
Ireland citizens not ordinarily resident in the UK
You will be liable to UK tax on rent you receive from letting a
property overseas, although you may deduct certain expenses such as
interest paid, maintenance and repair costs in calculating your
liability. If you make a loss from the letting of your property in any
year, this may be deducted in computing rental income you receive from
the same property in future years. You will be liable to UK tax on the
net rental income you receive from letting a property overseas to the
extent that you remit it to the UK*.
* Income of a UK resident from a source in the Republic of Ireland is
chargeable on the full amount arising rather than on the amount
Will I also have to pay foreign tax?
The country in
which your overseas income arises may tax you on that income. This will
depend on its own laws. You may need to ask the tax authority there for
advice. If you find that you are paying tax on your overseas income
both in the UK and in the country where the income arises, you will
normally be able to obtain relief for any double taxation.
How can I obtain
relief from double taxation?
Relief from double
taxation may be available under a double taxation agreement, or in other
ways. The aim of the relief is for the income to be taxed in one
country only or, if both countries tax it, for your combined tax bill
to be no more than the amount you would have to pay in the country with
the higher tax charge.
What is a double
A double taxation
agreement is an arrangement between the UK and another country, which
aims to prevent, or give relief for, double taxation. It provides that
income will be taxed in one country only or, if taxed in both, that one
country will allow credit for the tax paid in the other ('tax credit
relief'). Tax credit relief cannot exceed the amount of UK tax which
can be attributed to the overseas income. For example, if you have £100
of overseas income on which you have paid foreign tax of £20, your
liability to UK tax on the £100 would be reduced by £20 or, if less, by
the amount of UK tax chargeable on that overseas income. There is a
list of the countries with which the UK has double taxation agreements
in booklet IR 20 'Residents and non-residents - liability to tax in the
United Kingdom'. You can get details of any agreement which might
affect you from a Tax Enquiry Centre, your UK Tax Office or the
overseas tax authority.
What other relief
If the UK does not
have a double taxation agreement with the country in which your overseas
income arises, you may be entitled to a special relief called
'unilateral relief'. This works in the same way as credit relief under
a double taxation agreement, and ensures that the overseas tax you have
paid is set off against UK tax on the same income. Certain conditions
have to be met before unilateral relief can be given - a Tax Enquiry
Centre or your Tax Office will advise you whether you qualify for
relief in respect of a particular foreign tax. Alternatively, where a
claim for tax credit relief under a double taxation agreement or for
unilateral relief is not to your advantage, you may be entitled to a
foreign tax deduction. That is, you may be able to deduct the amount of
foreign tax you have paid on your overseas income in computing the
amount of income which is chargeable to UK tax. You can find out more
from a Tax Enquiry Centre or your Tax Office.
What do I do next?
If you have overseas income, you should complete a UK tax return each
year including details of the income and send it to your UK Tax Office.
Buying Property in Turkey - Taxes and compulsory insurance
Countries with which
has bilateral tax treaty agreements came into force as of April 2005 are
Austria, Azerbaijan, Belarus, Bangladesh, Belgium, Bulgaria, Czech
Republic, Croatia, China, Denmark, Egypt, Estonia, Finland, France,
Germany, Greece, Hungary, India, Indonesia, Israel, Italy, Japan,
Jordan, Kazakhstan, Kyrgyzstan, Kuwait, Latvia, Lithuania, Luxemburg,
Macedonia, Malaysia, Moldova, Mongolia, Netherlands, Norway, Pakistan,
Poland, Romania, Russia, Saudi Arabia (but only air transportation
activities), Singapore, Slovakia, Slovenia, South Korea, Spain, Sudan,
Sweden, Syria, Turkish Republic of Northern Cyprus, Tajikistan,
Thailand, Tunisia, Turkmenistan, Ukraine, United Arab Emirates, UK, USA,