Turkey has a comprehensive tax system that encompasses various types of taxes, including income tax, corporate tax, value-added tax (VAT), customs duties, and local taxes. Here is an overview of the tax system in Turkey:
Income Tax: Income tax is levied on the income earned by individuals and is calculated based on a progressive tax rate system. The tax rates vary depending on the income level, with higher incomes being subject to higher tax rates. Individuals are required to file an annual income tax return and pay any tax owed.
Corporate Tax: Corporate tax is imposed on the profits of companies operating in Turkey. The standard corporate tax rate is a flat rate, but there are reduced rates for certain industries or regions. Similar to individuals, companies are required to file annual tax returns and settle their tax liabilities accordingly.
Value Added Tax (VAT): VAT is a consumption tax levied on the sale of goods and services. The standard VAT rate in Turkey is 18%, but there are reduced rates of 8% and 1% for specific goods and services. They can also reclaim VAT paid on their purchases.
Customs Duties: Customs duties are imposed on imported goods, with rates varying depending on the type of goods and their country of origin. Turkey has a customs union with the European Union, which affects the customs duties levied on goods traded between Turkey and EU member states.
Local Taxes: Local governments in Turkey have the authority to levy various taxes, such as property tax, motor vehicle tax, and environmental cleaning tax. The rates and regulations for these taxes may vary between different municipalities.
It's important to note that the tax system in Turkey is subject to changes and updates, so it's advisable to consult with a tax professional or the relevant tax authorities for the most accurate and up-to-date information. If there is a subject you would like to receive consultancy on financial legislation, please write to info@baxleycpa.com.
Overall, the tax system in Turkey aims to generate revenue for the government, promote economic growth, and ensure compliance with tax regulations. Businesses and individuals are required to fulfill their tax obligations by filing tax returns, paying taxes on time, and keeping proper financial records.
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