Income Tax Filing in Turkey: What Expats Need to Know

Living as an expatriate in Turkey offers many benefits, from a vibrant cultural experience to comfortable living costs. However, one essential aspect you can’t ignore is filing your income taxes. Understanding Turkey’s tax regulations ensures you stay compliant and avoid unnecessary penalties. This guide breaks down the key aspects of income tax filing in Turkey for expats, helping you manage your financial responsibilities efficiently.

Understanding Tax Residency in Turkey

Your tax obligations in Turkey depend on your residency status. The Turkish tax authority considers you a tax resident if you spend more than 183 days in the country within a calendar year. This means:

• Tax residents must report their worldwide income in Turkey.
• Non-residents only need to declare their Turkey-sourced income.

For example, if you live in Turkey year-round and work remotely for a foreign company, your global income is taxable. On the other hand, if you visit Turkey for a few months while maintaining a primary residence elsewhere, only your local earnings (from rental income or Turkish employment) are taxable.

Types of Taxable Income for Expats

Income tax applies to various earnings in Turkey. As an expat, you may need to declare the following sources:

• Employment Income: Salaries from Turkish employers are subject to progressive income tax rates.
• Rental Income: Earnings from renting out property in Turkey must be reported with applicable deductions.
• Business Profits: If you operate a business in Turkey, revenue is taxable under corporate or personal income tax rules.
• Investment Earnings: Gains from interest, dividends, and capital investments can be taxed at varying rates.

For instance, if you work in Turkey under a legal employment contract, your employer deducts income tax automatically. However, if you rent out an apartment to other expats, you need to declare those earnings and pay the appropriate taxes.

Tax Rates and Filing Deadlines

Turkey applies a progressive tax system, meaning the rate increases as your income grows. The tiers for 2024 are approximately:

• Up to 110,000 TL: 15%
• 110,001 – 230,000 TL: 20%
• 230,001 – 550,000 TL: 27%
• 550,001 – 1,900,000 TL: 35%
• Above 1,900,000 TL: 40%

Income tax returns are due by March 31 of the following year. If you owe taxes, payments can be made in two installments—one in March and the second in July.

For example, an expat earning 250,000 TL annually will be taxed as follows:

• 110,000 TL at 15% = 16,500 TL
• 120,000 TL (remaining amount in the next bracket) at 20% = 24,000 TL
• 20,000 TL (remaining amount in the next bracket) at 27% = 5,400 TL
• Total tax: 45,900 TL

Claiming Deductions and Avoiding Double Taxation

Turkey allows certain deductions to reduce taxable income, including:

• Health insurance premiums
• Educational expenses for dependents
• Charitable donations to approved organizations
• Mortgage interest for property owners

Additionally, expats from countries that have a Double Taxation Agreement (DTA) with Turkey can avoid being taxed twice on the same income. This means if you already paid taxes on foreign earnings in your home country, you might be eligible for exemptions under Turkish law.

For instance, if you’re a British expat who already pays UK taxes on rental income, you can apply this agreement to prevent double taxation in Turkey.

Steps to File Your Income Tax as an Expat

Managing income tax filing in Turkey is straightforward when following these steps:

• Register for a Turkish Tax Number: Required for all financial transactions.
• Track Your Earnings and Deductions: Maintain records of income sources and eligible expenses.
• Use Online Filing Services: The Turkish Revenue Administration (GIB) portal allows digital submissions.
• Hire a Local Accountant: A tax advisor ensures compliance and helps optimize returns.

If you work remotely for an international company, keep records of all income sources and foreign tax payments to correctly declare your earnings. Using an accountant can streamline this process while minimizing potential errors.

Staying compliant with Turkish tax laws helps expats avoid fines and legal issues. By understanding residency rules, income categories, and available deductions, you can file your taxes efficiently while minimizing your financial burden. Plan ahead, seek expert guidance when needed, and enjoy your expat life in Turkey with peace of mind.