Navigating Taxes in Turkey: Guide For Entrepreneurs

Turkey remains an attractive destination for entrepreneurs in 2024, thanks to its dynamic economy, strategic location, and supportive business environment. However, understanding the country’s tax system is crucial for any business venture. This guide provides essential insights into Value Added Tax (VAT), export and import taxes, and other critical tax information for 2024.

VAT Rates in Turkey

VAT in Turkey varies depending on the type of goods and services, which is vital for pricing and financial planning:

• 1% Rate: This reduced rate applies to essential items such as medicines, books, and newspapers, making these items more affordable.
• 10% Rate: This mid-range rate covers goods and services like food, transportation, accommodation, water, and cultural and arts activities.
• 20% Rate: The standard rate applies to most other goods and services, affecting a broad range of products.

Taxes on Exports

Exporting goods from Turkey offers several tax advantages designed to promote international trade:

• VAT Exemption: Exports are not subject to VAT. Any VAT paid on goods purchased for export can be refunded, reducing the overall cost.
• SCT and VAT Refunds: Under certain conditions, you can recover SCT and VAT paid on exported goods after the export is completed.
• No Customs Duty: Exports are exempt from customs duty, ensuring that no additional costs are incurred.
• Transit Exports: VAT applies to transit exports since the goods are not nationalized. This VAT is non-refundable.

Taxes on Imports

Importing goods into Turkey involves several taxes that protect local industries and regulate trade:

• Customs Duty: The primary tax on imports, managed by the Ministry of Trade.
• Additional Customs Duty: Also regulated by the Ministry of Trade, this duty may vary based on the product type.
• Value Added Tax (VAT): Similar to domestic goods, VAT on imports is overseen by the Ministry of Treasury and Finance.
• Special Consumption Tax (SCT): This tax applies to specific products and is managed by the Ministry of Treasury and Finance.

Detailed Taxes for Imports

The exact taxes on imports depend on the nature of the product. It’s essential to review relevant fiscal and trade regulations to determine specific tax obligations.

Stamp Duty (2024)

Stamp duty in Turkey applies to various legal documents, declarations, and contracts. The updated rates for 2024 are as follows:

• 308.30 TL: For monthly VAT declarations, totaling 3,699.6 TL annually.
• 624.10 TL: For the annual Corporate Provisional Tax Declaration.
• 308.30 TL: For withholding tax returns.
• 467.20 TL: For quarterly provisional tax declarations.
• ‰ 9.48: Stamp tax rate for contracts.

Income Tax

Income tax in Turkey is calculated based on profit after deducting all expenses. The standard rate is 25%, with a reduced rate of 20% for export income, encouraging international trade.

Advance Tax Periods, Declarations, and Payment Dates

Advance tax is declared and paid quarterly, according to the following schedule:

• 1st Period (January, February, March): Declared and paid by May 17.
• 2nd Period (April, May, June): Declared and paid by August 17.
• 3rd Period (July, August, September): Declared and paid by November 17.

After these periods, an annual corporate tax return is issued, summarizing the year’s tax obligations.

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Where to Start?

Starting and running a business in Turkey offers significant opportunities, but understanding the tax landscape is essential for success. For more detailed information about company registration and taxes, check our company registration page. Explore the benefits of doing business in Turkey and ensure your venture thrives with the right knowledge and support. Discover our Business Starter Package to get started and receive comprehensive guidance on company registration, taxes, and more.