Tax System in Turkey: What You Need to Know for Your Company

While Turkey stands out with its investment-friendly policies and dynamic economy, the tax system is a critical issue for the business world. For companies, understanding tax regulations is crucial to ensure legal compliance and financial planning. In this article, we will examine the types of taxes in Turkey, practices and points to consider.

Main Tax Types in Turkey

Companies operating in Turkey are subject to the following basic taxes:

1. Corporate Tax:

‍  * Corporate tax is calculated on the annual net profit of the companies.
 * The corporate tax rate in Turkey is generally set at 20%; however, there may be periodic changes.‍

2. Value Added Tax (VAT):

‍ * Value Added Tax is an indirect tax levied on sales of goods and services.
* Although the standard rate is 18%, reduced rates such as 1% or 8% may be applied for some products and services.‍

3. Withholding Tax:

* It is a tax deducted from various income items such as employee salaries, rent payments and overseas payments.
* Rates vary depending on the type of payment.‍

4. Stamp Tax:

‍* It is a tax on official documents.
* It is paid for documents such as contracts, protocols and declarations.

Tax Declaration and Payment Processes

For companies operating in Turkey, there is an obligation to file regular declarations.

• Monthly and quarterly VAT returns must be filed.
• Annual corporate tax return must be prepared by the date set after the end of the fiscal year.
• Withholding tax is usually declared and paid monthly.

Tax Advantages and Incentives

Turkey offers various tax advantages and discounts to encourage investors:

• Free Zones: Companies operating in these zones may be exempt from corporate tax.
• Research and Development (R&D) Incentives: Income and corporate tax deductions can be provided for R&D investments.
• Investment Incentive Certificates: Advantages such as VAT exemption and customs duty exemption are offered for new investments.
  

Challenges in the Tax System

• Legislation Tracking: Tax laws may change from time to time, which requires constant updating.
• Multiple Declaration Process: The requirement to file returns at different times for different tax types can create additional workload for companies.
• Audits: Audits by tax authorities require a detailed process for compliance.

Meet Monetics' Tax Services

Monetics helps companies operating in Turkey to manage all their tax processes.

• Tax Planning: Determines the most appropriate tax strategies for your company.
• Declaration Preparation: Manages all declaration processes in a timely and accurate manner.
• Audit and Compliance: Prepares for tax audits and ensures full compliance with legal regulations.

Monetics' expert team simplifies complex tax processes, allowing companies to focus on their core business.

‍
The tax system in Turkey requires regular monitoring and expertise. With the right strategy and professional support, it is possible to manage tax processes effectively. Monetics stands by companies with its knowledge and experience and offers solutions for all tax management needs. If you are looking for a reliable partner in the financial processes of your business, you can benefit from the expert services of Monetics.