Income tax (or personal income tax) is levied on the income and earnings of real persons. Turkish Income Tax Law defines income as the net amount of the revenues and earnings acquired by an individual in a calendar year.

As partnerships do not have legal personality apart from their partners under Turkish law, the partners, instead of the partnership, are individually subject to income taxation on their share of the profits. 

Income taxpayers are divided into two sub-categories under the Turkish tax system: resident taxpayers and non-resident taxpayers.
The liability of resident taxpayers is unlimited, i.e. they have to pay tax on their income regardless of being derived in Turkey or elsewhere.
The following persons are treated as resident taxpayers according to Turkish Income Tax Law;

   Persons who permanently reside in Turkey,
   Persons who stay in Turkey for more than six months in a calendar year,(1) and
   Turkish nationals who work abroad either for a governmental body of the Republic of Turkey or a company, headquarter of which is located in Turkey. 

Non-resident taxpayers, on the other hand, are those who do not reside in Turkey but engage in an income-generating activity or own a property within Turkey. 

The persons who have the following earnings and revenues, inter alia, will be considered as non-resident taxpayers according to Turkish Income Tax Law:

    (Commercial) Income generated through a permanent establishment or a permanent representative in Turkey,
    Wages earned through providing services within Turkey,
    Rental income from a real property in Turkey, etc.

As seen from the above examples, the liability of non-resident taxpayers is limited with their income generated in Turkey only. 

Taxable Income

The income of an individual, within the meaning of Turkish tax regulations, may be subject to income tax provided that it is derived from one or more of the following income types;  

►    Commercial income,
►    Agricultural income,
►    Salaries and wages,(2)
►    Income obtained from independent professional activities,
►    Income obtained from real property (e.g. rent),
►    Income obtained from capital investment (e.g. interest payments and dividends), and
►    Other revenues and earnings. (e.g. income derived from the sales of patents).

Capital Gains

Capital gains, which are subject to income tax under normal conditions, enjoy a specific exemption under the current Turkish tax legislation.

When the shares of a listed joint stock company are transferred, the capital gains made from such transfer are not subject to income tax. If a shareholder of an unlisted Turkish joint stock company transfers his/her shares after holding them for a minimum period of 2 years, the capital gains derived from such transfer will, again, not be subject to income tax. It should be noted that such exemption does not apply to capital gains made as a result of transferring the shares of limited liability companies. So, when a real person shareholder transfers the shares of a limited liability company, no matter how long such shares have been held, the capital gains made from such transfer are subject to income tax. 


Under Turkish Income Tax Law, it is permissible to deduct various expenses from the gross income when calculating the taxable income of an individual. 

There are many expense items that can be deducted from the gross incomes of the individuals. In order to give a general idea to the reader, the below-mentioned deductibles are given here as examples:

Business-related expenses of the individuals who engage in commercial activities (rental payments, utility costs, membership fees to professional chambers, etc.) can be deducted from their gross revenues. 

Social security contributions and unemployment insurance premiums (the portions that must be paid by the employee according to law) can be deducted from the gross salary of the employee.

10% of the education and health expenses of the individual, his/her spouse and children, provided that such expenses are made within Turkey, can also be deducted from the gross income.

Donations to certain non-profit organizations, such as the Turkish Red Crescent or other similar organisations, are deductible from the gross income. 

Income tax law recognizes the depreciation for the fixed assets as well.


There are certain thresholds up to which the revenues and earnings of the individuals will not be subject to income tax. These thresholds are adjusted by the ministry of finance annually. 

Some of these exemptions, for the year 2018, are as follows;

    4.400 TRY of residential rental income is exempt from income tax.

    1.000 TRY of monthly income of the individuals with a high level of disability, 530 TRY of monthly income of the individuals with a medium level of disability and 210 TRY of monthly income of the individuals with a low level of disability are exempt from income tax.

    The increase in value up to 12.000 TRY occurred in a calendar year is exempt from income tax (certain exceptions apply). 

Tax Returns

Tax returns for income tax must be filed with the local tax office annually. 

The tax return for income tax is normally filed from March 1st to 25th in the following year.

When the income solely consists of commercial revenues that are determined according to the single-entry bookkeeping system, the tax return is filed from February 1st to 25th in the following year.

Income Tax Rates

Turkish Income Tax Law uses a system where the revenues and earnings of the individuals are calculated on a cumulative basis. The cumulative income is taxed progressively varying between 15% and 35%. 

As seen on the tables below, whether the source of income is of an employment or non-employment nature has an effect on the income tax to be paid by the individual.

When the income is derived from an employment related activity, as of 2018, the below rates will apply: 


RATE (%)

Up to 14.800 TRY


14.801 TRY – 34.000 TRY


34.001 TRY – 120.000 TRY


Above 120.001 TRY


On the other hand, the below rates will apply as of 2018, when the income is derived from a non-employment related activity: 


RATE (%)

Up to 14.800 TRY


14.801 TRY – 34.000 TRY


34.001 TRY – 80.000 TRY


Above 80.001 TRY


Payment Details

Under current regulations, it is possible to pay the income tax in two instalments. The first instalment has to be paid until the end of March and the deadline for the second instalment is at the end of July in the following year.

Loss Carryforward

Individuals who engage in commercial activities are permitted to carry forward the losses for five years.


(1)  Persons who come to Turkey for temporary engagements (businesspersons, scientists, journalists, etc.) or educational, medical or touristic purposes will not be considered as resident taxpayers even if they stay in Turkey longer than six months in a calendar year. However, the revenues and earnings derived in Turkey by such persons, unless they enjoy a specific exemption, will still be subject to income tax. (i.e. they are considered as non-resident taxpayers)
(2) Salaries of the liaison office employees are not subject to income tax. provided that certain conditions are met.