Global Employer Services Newsletter December 2019

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.

Mehmet Yildrim