Changes to legislation on income tax in Turkey
Changes to income tax legislation in Turkey were approved in December 2019 and mostly will come into effect from the 1 January 2020.
Some of the key changes are:
- The highest marginal tax rate will be increasing from 35% to 40% for those with an annual income of more than TRY 500,000.
- An annual tax return filing requirement will come into place for salaries more than TRY 500,000 annually, this will apply to all income earned in 2020.
- The withholding tax rate on salaries paid to football players in the Super League will increase from 15% to 20%.
- The above annual tax return filing requirement as well as the higher tax rate of 40% on income over TRY 500,000 will also apply to footballers from January 2020. These changes will only be effective on contracts signed after the 1 November 2019, any ongoing contract signed before this date will remain on the same withholding tax rate of 15% and no annual tax return will need to be filed regardless of whether annual income is over TRY 500,000.
- A new property tax will also be introduced as below:
- 0.3% for residence property worth between TRY 5 million and TRY 7.5 million
- 0.6% for residence property worth TRY 7.5 million and TRY 10 million
- 1% for residence property worth over 10 million.
- The number of days allowed to provide explanation for filing a corrected return has been extended from 15 to 30 days.
If you have any questions on the above, please do reach out to your BDO contact.