GENERAL LEGISLATIONS IN
TURKEY (TR)
PREPARED BY KURUMSAL DENETİM
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FOREING INVESTMENTs IN TURKEY
 Turkey wants to have more foreign investment and supports
all foreign investors
 It is easy to establish company with only foreign capital and
possible to transfer money-profit to mother company
 There are lots of incentives to support all investments
including foreign ones. Main incentives gives advantages on
VAT exemption, Custom Duty and Social Security payments.
2
CORPORATION FORMAT
1.
There 3 types of formats that easily establish
a.
Company : Capital amount is not depend on business type
a. Jointly Stock
I.
II.
III.
IV.
V.
b.
Limited
I.
II.
III.
IV.
b.
Minimum 10.000 TL capital is required
Even one partner enough to establish company
There is no nationality restrictions
No need board of directors, but Managers manages the company
Branch office
I.
II.
III.
c.
Minimum 50.000 TL capital is required
Even one partner enough to establish company
Foreigner partners must declared to Foreign Investment Directorship
There is no nationality restrictions
Board of directors must be registered to office
Almost same procedure with Jointly stock or limited company
Allowed to limited business operations
Branch must be managed a representative resident in TR
Liaison office :
I.
II.
Not allowed to trade (issuing invoices etc.)
Only for representation
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TAXATION
Basically taxes in TR, Corporate income tax, withholding tax, VAT,
Stamp Duty.
1. Corporate Tax
a.
b.
c.
d.
2.
General rate is %20 over annual profit
Annual profit is calculated as total expenses (such as operating
expenses, depreciation, previous year losses up to 5 years etc.)
deducted from total revenues
Operating expenses includes, salaries, rent payments, travel expenses,
etc.
Depreciation costs is depend on the fixed asset list announced by
Finance Minister
Withholding Tax
a.
b.
There are a few source of W/H tax such as salaries, rent payment to
individuals, receipt of self employed, interest/royalty payment to
abroad
W/H tax for salaries is calculated over net salary with the rate of %15 to
%35
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TAXATION
3. VAT
a.
b.
General rate for VAT is %18 (%1 and %8 is applicable only a few
limited purchases)
Reverse charge VAT is applicable for service imports
4. Stamp Duty
a.
b.
Applies to all signed contracts and rate is %0,948
Also salaries are subject to stamp duty. Rate is %0,759
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TAXATION PERIODS (DECLATARION/PAYMENT)
1.
2.
Calendar year is generally accepted as fiscal year.
Corporate Tax
a.
b.
c.
3.
W/H Tax
a.
b.
4.
Corporate tax is paid as advance to deduct from corporate tax for each
quarter
Corporate tax for previous year is declared 01-25 th of April and paid by 30
th of April
If pre-paid corporate taxes more than corporate tax, differences can be
request as refund
W/H tax paid for every month for previous month
W/H tax paid for previous month is declared 01-23 th and paid by 26 th
VAT
a.
b.
VAT paid for every month for previous month
VAT is paid for previous month is declared 01-23 th and paid by 26 th
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SOCIAL SECURITY SYSTEM
1.
2.
3.
4.
All employees must be declared to Social Security Institution before
start to work
All foreign to be employed have to get work permission
Total of social security payments is %36,5 of gross salary. But there
is an up-limit of the salaries. For 2013 first semi-annual, limit is 6.360
TL.
There are two types of social security payments : (In practice, all
payments are made by employer)
a.
Employee payments
I.
I.
b.
%19,5 of gross salary as social security premium
*** minimum rate %19,5. But rate depends on the danger level of company
business type
%2 of gross salary as unemployment contribution
Employer payments
I.
II.
%14 of gross salary as social security premium
%1 of gross salary as unemployment contribution
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ACCOUNTING OF COMPANIES
1. All companies need to keep books with the compliance of
Turkish GAAP
2. All official declarations must be submitted to official
authority by CPAs
3. We want to warn you that there are lots of official
declarations to be given. Even if it does not require to make
any payments, missing to give them will causes penalties.
So choosing CPA company is very important decision.
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Example for Salary Cost
Employee A gets 7000 TL gross salary
January Cost for Employee A
Social Security Base
: 7.000
Calculation of Income Tax Base;
Social Security employee premium : 7.000 TL x %14 = 980 TL
Social Security employee unemployment contribution : 7.000 TL x %1 = 70 TL
Income tax Base : 7000 TL - 980 TL – 70 TL = 5.950 TL
Income Tax calculation; 5.950 TL x %15 (income tax rate) = 892,50 TL
Stamp Duty;
7.000 TL x %0.759 (stamp duty rate) = 53,13 TL
Net salary to be paid to Employee A :
7.000 TL – 980 TL – 70 – 892,50 TL – 53,13 TL = 5004,37 TL (* calculated over minimum rate level)
Social Security employer premium : 7.000 TL x %19,5 = 1.365 TL
Social Security employer unemployment contribution : 7.000 TL x %2 = 140 TL
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Example for Salary Cost
Net Salary (to be paid to employee)
: 5.004, 37 TL
Social Security employee premium
Social Security employee unemployment contribution
Social Security employer premium
Social Security employer unemployment contribution
Total of Social Security payments (%36,5 of gross salary)
: 980 TL
: 70 TL
: 1.365 TL
: 140 TL
: 2.555 TL
Income Tax calculation
Stamp Duty
: 892,50 TL
: 53,13
Total of Employee cost
: 8.505 TL
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WE HOPE TO WORK TOGETHER
THANK YOU
END OF THIS PRESENTATION
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