Corporate taxation is an important aspect of the Turkish economy, and it is regulated by several laws and regulations. Companies operating in Turkey should be aware of the different types of corporate taxation, including income tax, VAT, sales tax, import duties, and export duties. The tax rates and brackets vary depending on the type of tax, and the laws and regulations governing them are regularly updated. Companies operating in Turkey should seek the advice of tax professionals to ensure compliance with the latest regulations.
Corporate Income Tax:
Corporate income tax is levied on the profits earned by companies in Turkey. The tax rate is progressive, ranging from 20% to 22%, depending on the taxable income of the company. The corporate income tax is regulated by the Turkish Corporate Income Tax Law, which was last updated in 2020.
Sales Tax:
Sales tax is a tax that is applied to certain goods and services in Turkey. The tax rate varies depending on the product or service, ranging from 1% to 20%. For example, the sales tax rate for cigarettes is 67%, while the rate for hotel accommodation is 8%. The sales tax system is regulated by the Turkish Tax Procedure Law, which was last updated in 2019.
Import Duties:
Import duties are taxes that are applied to imported goods in Turkey. The tax rate varies depending on the type of product, ranging from 0% to 50%. The import duty system is regulated by the Turkish Customs Law, which was last updated in 2017.
Export Duties:
There are no export duties applied to goods exported from Turkey.
Tax Brackets:
As mentioned earlier, the corporate income tax rate is progressive, and the tax bracket is determined based on the taxable income of the company. The tax brackets and rates for 2021 are as follows:
- Up to TRY 220,000: 20%
- Between TRY 220,000 and TRY 2,000,000: 22%
- Above TRY 2,000,000: 22% plus TRY 352,000
Import Duty Ranges:
The import duty ranges for various products in Turkey vary depending on the type of product. The range of import duties for some commonly imported goods are:
- Automobiles: 0% to 130%
- Electronics: 0% to 20%
- Clothing: 0% to 30%
- Food products: 0% to 50%
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