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Corporate tax
| Tax rate for resident companies |
20%
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| Tax rate on long-term capital gains |
In Turkey, capital gains are taxed at the rate of basic corporate income tax.
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| System governing groups of companies and dividends paid by subsidiaries to their parent companies |
There is no withholding tax for dividends.
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| Tax rate on branches |
Branches and subsidiaries are taxed in the same way as resident companies. A fully foreign-owned subsidiary will be liable for tax on its worldwide income whereas a branch will be liable for tax on its income derived in Turkey only, unless otherwise specified in a treaty.
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Income tax
| Fiscal year |
The fiscal year begins on January 1-st and ends on December 31 of the same year.
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| Income tax rate |
The progressive rate varies from 15% to 35% according to the tax bracket.
Tax Schedule 2006 (for salaries incomes only):
| From 0 to 7,000 YTL | 15% | | From 7,001 to 18,000 YTL | 20% | | From 18,001 to 40,000 YTL | 27% | | Beyond 40,001 YTL | 35% |
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| Tax deductions or other allowances |
Annual fixed deduction must not exceed 35% of the wages. There are the other deductions depending on the status of each (marriage, children with responsibility etc).
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VAT rates
| Standard rates |
18%
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| Reduced rates |
Reduced rates are 1% and 8%. Some products are taxed up to 40%.
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Other important taxes
| Name of tax |
Rate |
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Succession and donation
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1% to 30%
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Tax of bank deals and insurance
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5%
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Royalties
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Held at the source of 10%
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Accounting
General accounting principles
CONSOLIDATED BALANCE SHEET
ASSET
CIRCULATING ASSETS
- Liquid assets
- Treasury bonds
- Short-term investments
- Debts
- Stocks
- Other current assets
TOTAL CIRCULATING ASSETS (I)
FIXED ASSETS
- Commercial debts.
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Obligations and publications
The balance sheet and the profit and loss account must be disclosed in Turkish currency and drafted in a clear , complete and easily understandable way.
Certification and auditing
As the control of accounts is not under the total influence of the government anymore, the certification of accounts is made in accordance with the "Turkish Commercial Law".
The financial results must be published to the Ministry of Finance.
Professionals and representative organizations
People who work as accountants and the bodies authorized to control and guarantee the accounts of companies are submitted to the Law n°3568.
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| Last modified in
2006 - ongoing update
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