Turkish tax law reaches almost every foreigner who lives, works, invests or owns property in Turkiye — often before they realise it. Whether you owe Turkish tax at all depends on a residency test in the Income Tax Law; what you owe then depends on where the income arises, which of the tax codes applies, and whether a double taxation treaty with your home country overrides the domestic rule.
Bayraktar Attorneys advises foreign individuals and companies across the whole tax lifecycle: working out your residency position before it becomes a problem, registering you with the tax office, preparing and filing returns, and defending you when the tax authority issues an assessment or a penalty. We work in English, under power of attorney where you prefer not to travel.
Speak to an English-speaking Turkish tax lawyer about your residency position, your filings, or a tax office notice you have received.
Most foreign clients come to us with one of three problems: they do not know whether Turkiye can tax them, they know they must file but not how, or the tax office has already written to them. We handle all three.
Our tax work covers residency and structuring advice, registration with the tax office and obtaining a tax identification number, preparation and filing of annual and periodic returns, review of treaty positions, and full representation in tax audits, settlement meetings and Tax Court litigation. Where the matter touches a company, a property purchase or an inheritance, the same team handles the corporate, real-estate or succession side so nothing falls between advisers.
Everything in Turkish tax starts here. The Income Tax Law No. 193 divides taxpayers into full taxpayers (*tam mükellef*) and limited taxpayers (*dar mükellef*), and the consequences are very different: a full taxpayer declares worldwide income in Turkiye, while a limited taxpayer declares only income sourced in Turkiye.
You are treated as a full taxpayer if your legal residence (*ikametgâh*) is in Turkiye, or if you stay in Turkiye continuously for more than six months in a calendar year. The six-month test counts days, not intentions, and temporary absences do not automatically reset it.
The law also carves out exceptions: people who come to Turkiye for a specific, defined assignment, for education, medical treatment, or travel are not made resident by that stay alone. Whether your situation fits an exception is exactly the kind of point a tax inspector will test years later, so it is worth documenting at the time. Our guide to resident tax in Turkiye works through the practical fact patterns.
For a limited taxpayer, the question becomes whether income is Turkish-sourced. Rent from a flat in Istanbul is; a salary paid abroad for work performed abroad generally is not. Turkish-source income of non-residents is frequently taxed at source through withholding, which can end the matter without any return being filed.
For a full taxpayer, foreign income comes into scope — foreign salary, foreign rent, foreign dividends and foreign capital gains. This is the single most common surprise for new arrivals, and it is also where treaty relief and Turkiye's newer foreign-income reliefs matter most.
Turkiye has a wide double taxation treaty network. A treaty can allocate taxing rights to one state, cap the withholding rate on dividends, interest and royalties, and — where both states claim you as resident — apply tie-breaker tests based on permanent home, centre of vital interests, habitual abode and nationality.
Treaty relief is not automatic: it usually requires a residency certificate from the other state and a correctly taken filing position. See our guide to double taxation agreements, and for US-connected clients the Turkiye–U.S. treaty guide.
Turkish personal income tax is charged on seven categories of income, at progressive rates that currently run from 15% in the lowest band to 40% in the top band. Employment income is normally taxed at source by the employer, which is why many employees never file a return; other categories usually require an annual declaration.
Salary paid by a Turkish employer is withheld monthly and rarely needs a return. Where you have more than one employer, income above the declaration threshold, or income paid from abroad into a Turkish tax residence, an annual return is likely to be required.
Independent professional income (*serbest meslek kazancı*) is declared annually and is subject to withholding when paid by businesses. Deductible expenses matter a great deal here — our note on deductible business expenses in Turkiye sets out what the tax office will and will not accept.
Rent from Turkish real estate is Turkish-source income and is taxable whether or not you live in Turkiye. Residential rent benefits from an annual exemption amount and can be declared using either the lump-sum expense method or actual documented expenses; commercial rent paid by a business is usually subject to withholding instead.
Foreign owners routinely under-report here because the rent is paid abroad or in cash. That is the fact pattern audits are built on, and it interacts badly with the title deed value declared on purchase.
Dividends, interest, and gains on shares and property each have their own regime, and several of them are handled by final withholding rather than declaration. Property sold within five years of acquisition is generally within the scope of capital gains tax, while a sale after five years is generally outside it.
These are the most-asked questions we get, and each has a dedicated guide: capital gains tax, tax on Turkish and foreign stocks, and withholding tax. You can also run a quick estimate with our capital gains tax calculator.
Companies resident in Turkiye are taxed on worldwide profit under Corporate Tax Law No. 5520; non-resident companies are taxed on Turkish-source profit, typically through a branch or a permanent establishment. The headline corporate income tax rate is 25%, rising to 30% for banks and financial institutions, with reduced rates available for certain exporters and manufacturers.
Corporate taxpayers file quarterly advance (provisional) tax returns during the year and an annual corporate tax return after year end, with the advance tax already paid credited against the final liability. Transfer pricing, thin capitalisation and controlled foreign company rules all apply to cross-border groups and are checked on audit.
For a plain-English walk-through of the company side, see taxation for companies in Turkiye and, for exits and restructurings, taxation of share transfers.
VAT (*KDV*) applies at a standard rate of 20%, with reduced 10% and 1% rates for listed goods and services, and is filed monthly. Stamp duty applies to a surprisingly wide range of signed documents, including many commercial contracts, and is a routine source of unexpected assessments.
If you import or export, customs duties and import taxes sit alongside VAT and are assessed at the border. Turkiye is in a customs union with the European Union, so goods in free circulation within the EU largely move duty-free, while goods originating elsewhere are dutiable — origin, tariff classification and customs valuation therefore decide the bill, and each of them is a recognised audit target. Special consumption tax (*ÖTV*) applies on top for vehicles, fuel, alcohol, tobacco and certain electronics.
Where you are buying property or exporting, exemptions may remove VAT entirely — that is handled in detail on our VAT exemption services page and in the VAT guide; property buyers should also read VAT exemption on property purchases for foreigners.
Turkiye runs an extensive incentive system: investment incentive certificates, technology development zones, free trade zones, and the reliefs introduced by the 2026 package. Targeted sectors — R&D, energy, manufacturing and export-oriented activity — attract the deepest allowances, and small and medium-sized enterprises qualify for reliefs that larger groups do not. These can change the effective rate dramatically, but each carries its own qualifying tests and clawback risk.
The 2026 package — including the 20-year foreign-income exemption and the asset amnesty — is covered on our dedicated tax incentives service page; free zones are covered in tax exemptions in Turkish free trade zones. Incentives sit on top of the wider framework in Turkiye's foreign investment law, which governs how foreign capital is treated in the first place.
Owning assets in Turkiye creates its own standing tax obligations, separate from income tax. On purchase, a title deed fee of 4% of the declared value applies, conventionally split between buyer and seller. Thereafter, annual property tax (*emlak vergisi*) is assessed by the municipality at rates that vary by property type and by whether the municipality is metropolitan.
Vehicles attract annual motor vehicle tax; businesses with an address in a municipality attract environmental cleaning tax; and transfers on death attract inheritance and gift tax at progressive rates, with a tax clearance certificate required before the title deed can be transferred to heirs.
Before you can pay Turkish tax you need to exist in the system. Foreign nationals obtain a tax identification number — for most purposes the foreigner identity number now serves this role — which is required to open a bank account, buy property, register a company or file anything at all.
Filing then runs on a fixed calendar rather than on your anniversary: the annual personal income tax return is filed in March for the previous calendar year and paid in two instalments, corporate returns follow after year end, and VAT and withholding returns are periodic. Missing a date does not merely delay matters — it triggers late payment interest and, in many cases, an automatic penalty.
This is where most of our tax work actually happens. A Turkish tax dispute rarely starts with litigation — it starts with a letter, an information request, or an inspection report, and the decisions you take in those first weeks largely determine the outcome.
Tax Procedure Law No. 213 sets out both the assessment machinery and the penalty regime. An underpayment normally attracts a *vergi ziyaı* penalty equal to the tax lost, rising to three times where the conduct falls within the tax offences in Article 359, alongside procedural penalties and late payment interest.
Many assessments can be resolved administratively. A request for correction addresses clear factual or calculation errors. Settlement — available both before an assessment is formally issued (*tarhiyat öncesi*) and after (*tarhiyat sonrası*) — allows the tax and, importantly, the penalty to be negotiated down, and a settled file is closed for good.
Settlement is a strategic choice, not a default. Accepting it waives the right to litigate, so it should only be taken once the strength of the underlying position has been assessed.
Where settlement is not appropriate, an action is brought before the Tax Court, generally within 30 days of notification. Filing suit suspends collection of the disputed assessment in most cases, which is often reason enough to litigate rather than pay under protest.
Tax Court decisions are appealable to the Regional Administrative Court (*istinaf*) and, for qualifying matters, onward to the Council of State (*Danıştay*). We appear at each stage and handle the interaction with the tax office in parallel.
Not every tax problem stays administrative. Issuing or using false documentation, keeping a second set of books, or destroying records fall under Article 359 of the Tax Procedure Law and are prosecuted as criminal offences carrying imprisonment, separately from the tax assessed.
If you have received anything that mentions Article 359 or a *naylon fatura* allegation, treat it as urgent — see fake invoice crime and VUK 359 penalties — and take advice before responding to the inspector.
We start with the facts that decide everything: where you live, how many days you spend in Turkiye, where your income arises, and what you have already filed or received. You leave the call knowing whether Turkiye can tax you and what the exposure looks like.
We determine your taxpayer status under the Income Tax Law, test it against any applicable double taxation treaty, and set out the filing position we can defend — in writing, before anything is submitted.
We obtain your tax identification number, register you or your company with the correct tax office, gather residency certificates and supporting records, and set up online access so filings can be handled remotely.
We prepare and submit the returns due, calculate the liability and instalments, and confirm payment. Where a relief or exemption applies, we document the basis for it so it survives a later inspection.
If the tax office opens an inspection or issues an assessment, we respond to the inspector, attend settlement meetings, and where necessary bring proceedings in the Tax Court within the appeal deadline.
We keep you on the calendar — periodic returns, annual declarations, changes in your day count or residence status — so the next year does not become the next dispute.
We act almost exclusively for foreign individuals and international businesses, in English, and we are used to explaining Turkish tax concepts to people whose home system works differently.
The same team that takes the filing position defends it. That matters: positions taken for convenience at filing are the ones that fail on audit.
Registration, filings, tax office correspondence and most dispute steps can be carried out without you travelling to Turkiye.
Tax rarely arrives alone. Our corporate, real estate, inheritance and immigration teams work from the same file, so a property purchase or a residence permit does not create a tax problem nobody looked at.
Atty. Nevzat Oğulcan Bayraktar
Confidential, English-speaking tax advice for residents, expats and investors — from first filing to Tax Court.
This page provides general information about tax law in Turkey and does not constitute legal advice. For guidance on your specific situation, please contact Bayraktar Attorneys for a consultation.
