What is Turkish income tax?

Tax in Turkey

Turkey's tax laws are among the most favourable in the OECD, making the country an attractive destination to live, work and invest.

What is the income tax rate in Turkey?

Income taxes

Under Turkish tax legislation, this includes two main income taxes: personal income tax, and corporate income tax

Personal income tax: an individual's income is subject to personal income tax. Income is defined here as the net amount of all an individual's earnings and revenues within a calendar year. An individual's income can consist of one or more income elements including:

- Agricultural profits

- Business profits

- Salaries and wages

- Income from independent personal services

- Income from immovable property and rights (rental income)

- Income from movable property (income from capital investment)

How much income tax will I pay on my Turkish property?

If you're renting your Turkish property out to holidaymakers, you will be required to pay tax on any income you earn. The rate varies depending on the level of revenue, but starts at 15%.

Income up to 18,000TL – 15% (2,700TL)

Income from 18,000TL – 40,000TL – 20% (4,400TL)

Income from 40,000TL – 98,000TL – 27% (15,660TL)

Income over 98,000TL – 148,000TL – 35% (17,500TL)

Do foreigners pay income tax in Turkey?

Where a double taxation agreement exists between your home country and Turkey, tax paid in Turkey can be used to offset the tax you pay at home. In Turkey, there are two ways to determine your net rental income, and that's either through the actual deduction method, or lump sum method:

- Actual deduction method: this deducts real expenses (for example, electricity, water, administrative expenses, depreciation and repairs) from the gross rental income. 

- Lump sum method: taxpayers can deduct 25% from their gross income to arrive at the taxable income. If you choose the lump sum method, you cannot change to the actual deduction method for two years. 

Property owners also have a personal tax allowance which is deducted from the gross rental figure. The Turkish tax year runs from March 15 to March 15. Any tax owed must be paid at the end of March of the closing tax year.

Example of rental income tax in Turkey

If your home generated a total revenue of 10,000TL during the financial year, you would deduct a personal tax allowance of 2,900, expenses of 1,775, leaving you with 5,335 that is liable for taxation. Applying the 20% tax band to this leaves you with a total payable figure of 1,065 TL.

Will I need a business licence to rent my Turkish property?

Please note that as of 2018, property owners renting their Turkish holiday homes must have a business license to operate, and need to pay business taxes. We cover this in more detail here.


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