Tax Consulting In Turkey: An Expats Guide

Tax Consulting In Turkey

Diving into the complex world of Turkish taxation can feel like navigating the bustling Grand Bazaar—exciting yet overwhelming, right? Worry Not! We’ve got your back!

Whether you’re a thriving business or a newcomer to the Turkish market, the right tax consulting can illuminate the path to fiscal compliance and optimization. This guide is your compass to finding expert tax consulting in Turkey, ensuring your financial journey is both profitable and compliant.

Let’s dive in!

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What Is Tax Consulting?

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A tax consultant advises and guides clients on tax-related matters. 

They work with individuals and organizations to ensure they comply with tax laws and help minimize potential tax liability.

Tax consultants typically have a deep understanding of tax law and accounting principles.

This role might be a good fit for detail-oriented, analytical individuals who enjoy working with numbers.

Many businesses engage tax consultants to assist with taxes. Organizations that employ tax consultants include accounting firms, law firms, banks, and real estate organizations. 

These specialists can also maintain self-employment.

What Comes Under The Duties Of A Tax Consultant?

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A tax consultant provides tax advice and support to individuals, businesses, and organizations on various tax issues. 

Their work typically involves preparing and submitting tax returns, researching tax laws, advising on tax planning, and representing clients in disputes with the tax authorities.

A tax consultant’s role may grow and shift as they mature in the position and become more involved in tax planning and management. 

They could also specialize in tax research to advise team members and other stakeholders.

They primarily ensure that clients pay the correct amount of taxes. 

For instance, a typical day in the life of a tax advisor might involve researching a notice of tax liability and recommending a strategy while filing a pending tax return and meeting with the IRS to handle any disputes.

Common duties include:

  • Preparing And Filing Tax Returns: Tax advisors collect information from clients, such as income and expenses, to calculate taxes owed. Once computed, the tax consultant files a return with the appropriate regulatory body.
  • Researching Tax Laws: To ensure clients comply with the latest regulations, tax consultants may read tax law journals, attend seminars, and network with other tax professionals. Research skills benefit organizations by ensuring that clients follow the law and pay the correct amount of taxes.
  • Representing Clients In Audits: Tax consultants represent clients during audits to ensure the tax return is accurate to minimize tax payments. By guiding the process, they can reduce the time and money invested by the organization and the overall tax liability.
  • Providing Tax Advice: These accounting specialists advise clients on how to minimize tax liability. This guidance may cover available deductions or types of income to report.
  • Assisting Clients With Tax Planning: A tax consultant may develop and recommend strategies to reduce taxable income, take advantage of tax breaks, or defer taxes later.

What Are The Tax Consulting Areas Of Expertise?

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Tax consultants can concentrate their work on handling specific tax laws and regulations. 

By specializing in a particular field, these professionals can become experts in the tax laws and regulations that apply to that sector.

Tax Analyst 

A tax analyst researches tax laws and regulations, prepares tax returns and financial statements, and provides clients with tax planning and consulting services. 

They must have strong analytical and research skills and a thorough understanding of tax laws and regulations.

Tax analysts typically work in public accounting firms, corporate tax departments, and government agencies. 

Entry-level positions may involve preparing tax returns and financial statements, while senior positions may provide tax planning and consulting services. 

A tax analyst typically reports to the head of the tax department.

SEC Reporting Consultant

The Securities and Exchange Commission (SEC) reporting consultants can use backgrounds in accounting and finance to help clients comply with reporting requirements. 

They interpret SEC rules and regulations to communicate with clients and team members.

These niche accounting professionals typically work as employees or independent consultants in accounting firms, law offices, or corporate finance departments. 

Responsibilities include filing SEC reports, reviewing SEC filings for accuracy and compliance, and advising on disclosure requirements and best practices.

An entry-level position for this career path may be a staff consultant, while a tenured consultant could advance to a managing consultant role.

Tax Analysts And SEC Reporting Consultants

Tax analysts and SEC reporting consultants analyze and prepare tax documents. 

Each advises clients on tax law changes and potential business outcomes, but SEC reporting consultants also report disclosure requirements.

Both positions often advance professionally after becoming certified public accountants or obtaining master’s degrees in accounting or taxation.

How Are Taxes In Turkey?

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Managing finances is a critical component of settling into a new country. 

For expats living in Turkey, understanding the country’s financial landscape and regulations can play a crucial role in achieving financial stability and security. 

Gaining insight into the banking system, taxation, investment opportunities, and insurance options will empower expats to make well-informed financial decisions while living in Turkey.

In this comprehensive guide, we aim to provide expats with an all-inclusive resource designed to address the most important financial matters. 

From opening a bank account to understanding taxes, we’ve got you covered. We’ll also explore various investment opportunities available in Turkey and offer practical tips for managing your finances.

Whether you’re contemplating buying property, investing in stocks or bonds, or planning for retirement, our guide is tailored to help you quickly navigate the financial landscape. 

Furthermore, we’ll also dive into the realm of insurance, discussing the available options and their significance for expats.

Knowledge is power, and we aim to provide you with the necessary financial knowledge to protect and grow your wealth while living in Turkey. 

Embarking on a new life can be challenging, but being equipped with the right information and insights can give you confidence in your financial journey. 

Use this guide as a trusted companion throughout your expat experience, empowering you to make the best financial decisions for your future in Turkey.

How To Understand Taxes In Turkey?

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Expats residing in Turkey need to be aware of their tax obligations. Here’s a brief overview of the taxation system for expats in Turkey:

  • Income Tax: If you are considered a tax resident in Turkey, you will be subject to income tax on your worldwide income. Residency is determined by spending 183 days or more in Turkey within a calendar year. Expats who are not tax residents will only be taxed on their income derived from Turkey. The income tax rates in Turkey are progressive, ranging from 15% to 40%, depending on your annual income.
  • Property Tax: Property owners in Turkey are liable to pay property tax, calculated based on the property’s value. Property tax rates for residential property owners range from 0.1% to 0.6%, depending on the municipality.
  • Social Security Contributions: Expats working in Turkey are required to contribute to the country’s social security system. The mandatory contribution rate is 14% of the employee’s gross salary, with an additional employer contribution of 15.5%.

What Are The Best Tax Consulting Agencies In Turkey?

Accace

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Accace is a proactive consultancy and outsourcing partner who bridges the gap between needs and solutions. 

Combining smart and streamlined technology with a holistic approach, they provide an all-round care to clients and consider their matters as their own. 

With over 800 experts and more than 2,000 customers, they have vast experience with facilitating the smooth operation and growth of small to large-scale, global businesses.

Their tax compliance services revolve around the corporate income tax (CIT), value added tax (VAT), personal income tax (PIT) and social security, local taxes, withholding taxes, excise taxes and custom duties in Turkey.

Get started with Accace 🔥

Tax Consulting Turkey

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Nowadays, Globalization demands a new, adaptable and different type of accountant who is properly and exactly qualified.

Chartered Accountant/ Consultant who are experienced and expert business growth advisers, management accountants, financial experts as well tax consulting, tax planning experts and advisers. 

Tax consulting Turkey specialises in establishment of every kind of companies, getting of foreign work permit, residence permit, tax Ä°ncentives and investment incentives, tax investigations.

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BDO Turkey

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Tax legislation is frequently updated in Turkey – as is the case in other parts of the world. As the legislation is diverse in nature and the regulations are open to interpretation, the tax compliance process is complicated. 

Therefore, companies may not even realize they have incurred liabilities, which can lead to penalties by overlooking tax related risks.

Sometimes, not taking advantage of the exemptions can lead to missing out on incentive and discount opportunities.

Minimizing tax-related risks and benefiting from tax advantages for your company is only possible with the right guidance at the right time. 

Their expert team is at your service for all the professional solutions you will need.

BDO provides wide range of tax advisory services:

  • Domestic /international corporate tax and income tax,
  • Withholding tax,
  • Value added tax, special consumption tax, stamp tax, taxes on BITT and RUSF,
  • Wealth Taxes such as Inheritance and Property tax,
  • International tax treaties,
  • Investment incentives,
  • Special advisory services for year-end inventory and closing transactions,
  • Delivering opinions by conducting investigation and research on specific issues,
  • Providing advisory service to meet our clients’ inbound /outbound business start-up needs such as:  establishing company, branches and liaison office,
  • Tax planning, company restructurings.

Get started with BDO 🔥

Grant Thornton

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At Grant Thornton Turkey, they also offer tax consultancy services to help our taxpayer clients manage their tax risks. 

They offer a clear road map to our corporate clients, regarding the pretty complicated tax regulations in effect in our country. 

In this context, Grant Thornton aims to offer effective and reliable results to our clients, in the light of the laws and regulations in force in Turkey. 

With reference to the reports produced through the tax audits they perform, they not only review the practices of our corporate clients in terms of compliance with regulations, but also aim to identify potential tax risks. 

Moreover, they offer tax planning services to cover subsequent periods. 

The tax consultancy services they offer at Grant Thornton Turkey cover the following laws:

  • Tax Procedure Law
  • Corporate Income Tax Law
  • Income Tax Law
  • Value Added Tax Law
  • Special Consumption Tax Law
  • Stamp Duty Law

The goal is to achieve savings on taxes based on a strong command of these laws as well as Incentive and Subsidy Regulations and the Agreements to Prevent Double Taxation.

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What Are The Main Legal Instruments Applicable To Tax Law In Turkey?

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There are several legal texts providing norms, principles and standards in terms of taxation. Tax lawyers and legal practitioners face a broad range of challenges in the implementation of taxation norms. 

What is more, the existing legal framework for tax matters is amended and changed continuously by lawmakers. 

Three legislatures, in particular, are of great importance in shaping tax law in Turkey.

  • Firstly, the Income Tax Code (Numbered 193),
  • Secondly, the Corporate Tax Code (Numbered 5520),
  • Thirdly, Value Added Tax Code (Numbered 3065).

Additionally, communiqués are critical in formulating specific rights and tax obligations in line with relevant legislation.

The Turkish taxation system covers two main income taxes: personal and corporate income tax.

What Is The Main Criteria Of The Turkish Income Tax Code For Taxation?

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According to the established taxation principles worldwide, there are two main criteria for taxation: residency and nationality. 

It is helpful to understand that Article 3 of the Income Tax Law (Numbered 193) stipulates residency as the leading criterion for taxation. 

Income Tax Law bases taxation of natural persons on the territoriality principle. Indeed, according to Article 3, those residing in Turkey are liable to pay tax for his/her worldwide income.

Are Foreigners Liable For Income Tax In Turkey?

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As for the taxation of aliens, it must be taken into account that Turkey is a party to numerous bilateral agreements intended for the prevention of double taxation. 

Besides, any person staying in Turkey for more than 6 months within a calendar year is assumed to be a resident of Turkey under Article 4 of the Income Tax Code. 

It necessarily means that taxation obligations are applicable to them.

There are, of course, exceptions to that rule according to Article 5. 

In that sense, foreigners staying in Turkey for six months or more for a specific job or business or particular objectives cannot be regarded as residents.

What is more, non-residents are not obligated to pay tax in principle. Having said that, non-residents must pay tax when they earn income in Turkey under Article 6.

Who May Be A Taxpayer Under The Income Tax Code?

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According to Article 1, a natural person’s income is subject to taxation. It necessarily means that individuals are liable to pay income tax. 

Personal income may consist of any earnings, among others;

  • Agricultural Profits,
  • Business Profits
  • Salaries And Wages
  • Income From Independent Personal Services
  • Income From Immovable Property And Rights (Rental Income)
  • Income From Movable Property (Capital Investment Income)

Central Role Of The Corporate Tax Code In Turkey

Corporate Tax Law (Numbered 5520) regulates tax liability for corporations. 

It is significant to note that Corporate Tax Law stipulates “tax liability” based on the question of where the legal or business centre of the relevant company is. 

If any of these is not located in Turkey, they only pay tax to the extent that they earn income in Turkey under Article 3.

Who May Be A Taxpayer Under Corporate Tax Law?

Taxation rates are changeable depending on the type of income and relevant sources. Article 1 illustrates that the following legal entities are responsible for paying taxes:

  • Capital companies
  • Cooperatives
  • Public economic enterprises
  • Economic enterprises owned by associations and foundations​
  • Joint ventures.

What Are The Tax Requirements For Foreigners Living In Turkey?

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If a taxable event has occurred in Turkey, foreigners must pay the tax, regardless of whether they are residents or non-residents. 

Foreigners must acquire a tax ID number for legal purposes. 

For example, they must pay property tax and, if any, rental income tax, even if they do not have a residence permit in Turkey.

If foreigners are from a country that is a party to the double taxation agreement, in Turkey, they can avoid paying tax by paying it in their nation. 

The double taxation agreement, i.e. tax treaty, protects from paying double taxes on the same income.

On the contrary, if the real estate is not within the borders of TĂĽrkiye, the taxable event is not considered to have occurred here. 

Consequently, there is no need to pay property taxes on the real estate. In other words, foreigners are exempt from paying taxes for properties in their countries.

In addition, the Turkish tax system determines foreigners’ tax duty. 

That’s why taxes resulting from an event, property, or other comparable occurrences in their nations are not binding on Turkey.

For example, a nation collects taxes on behalf of the government on drawing accounts, but, on the other hand, Turkish law does not recognize this sort of tax. 

Then, regardless of whether foreigners have a residence permit in Turkey, there is no need to pay tax because it is assessed per local law.

What Turkish Tax Forms Do Foreigners Need To File?

Tax filing in Turkey for foreigners is optional for all. You do not have to file a tax return if your income comes from an employer that deducts taxes. 

However, if you get income from a business or self-employment, you probably must file an individual tax return.

In addition, you must submit an annual tax return if you run your own business or earn money through self-employment.

What Is Meant By A Tax Identification Number?

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The National Identity Tax Number (NITM) applies to all Turkish or foreign taxpayers as of 1 July 2006. Foreigners residing in Turkey for more than six months must have a NITM. 

It is critical to remember that the submission of NITM is an obligation to carry out and finalize administrative actions and banking transactions.

What Are Tax Authorities In Turkey?

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Turkish Revenue Administration is the central national authority to levy and collect taxes. Revenue Administration operates under the umbrella of the Ministry of Finance. 

In the justice sector, individuals are granted the right to lodge a case before tax courts for the revision, annulment or withdrawal of the taxation and related administrative action.

What Are The Benefits Of Working With A Tax Consultant In Turkey?

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Tax advisors or consultants help taxpayers manage their tax risks and offer guidance on lowering their taxable income, boosting tax refunds and tax exemptions.

By conducting audits and resolving tax issues with relevant departments, they ensure their clients pay only what they should according to their income level, investments and other parameters.

How Can You Find A Reliable Tax Consulting Service In Turkey?

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It is essential that you conduct an extensive study and consider the feedback from other customers who share their experiences with the process. 

When researching, you should pay close attention to whether the companies you come across have an experienced team in this field and whether this team consists of lawyers and experts.

Is Turkey Tax-Friendly?

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Turkey has a territorial tax system exempting foreign dividends and capital gains income without country limitations.

The personal income tax on dividends is 20 percent, below the OECD average (24 per cent).

The country provides an ACE, addressing the debt bias inherent to the standard corporate income tax.

Countries raise tax revenue through individual income taxes, corporate income taxes, social insurance taxes, taxes on goods and services, and property taxes.

The mix of tax policies can influence how distortionary or neutral a tax system is.

Taxes on income can create more economic harm than taxes on consumption and property.

However, the extent to which an individual country relies on these taxes can differ substantially.

Conclusion

As we wrap up this guide, the importance of adept tax consulting in Turkey cannot be overstated. With the right advisor, the maze of taxation becomes a roadmap to financial success and peace of mind.

Armed with expert advice, you’re not just surviving the tax season; you’re thriving throughout the year. Let your tax journey in Turkey be led by expertise, and watch your endeavors flourish under the Turkish sun.

Tax Mastery!

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