Paying Taxes in Turkey

1. What is the corporate tax in Turkey?
The state of Turkey has a progressive tax system, meaning the higher the income of a company, the higher the tax. However there are limits for the corporate income tax in Turkey. The corporate tax rates vary between 15% and 35%, whereas the standard tax rate is 20%.

2. What is the VAT in Turkey?
Similar to the corporate income tax, the Turkish tax law establishes the VAT, or KDV in Turkey between 1% and 18%, but it generally is applied at 18%.

3. How can the VAT be refunded in Turkey?
Turkey tax law imposes a VAT standard rate of 18% which has to be paid by companies. Paying this tax produces effects on the companies' profits and implies certain procedures. However the Turkish VAT can be recovered by submitting a refund application to the Tax Authorities in Turkey. It is mandatory for the application to contain original invoices, a copy of a recent tax certificate and other documents. Usually the VAT return is completed within 3 to 9 months, but in some cases it can take up to 12 months.

4. What is the dividend tax in Turkey?
Under Turkish tax system all taxable companies are subject to the dividend withholding tax applied at 15% to profits.

5. Are there any incentives for foreign investors in Turkey?
Turkey ranks as one of the most sought after companies to invest in, due to its geographical location, natural resources abundance, agricultural heartland, heavy industry and favorable relations with other countries. As a plus, foreign investment is highly valued as the government offers a welcoming environment as well as incentives for investors. Privatization programs in fields of energy, telecommunications, infrastructure, education and health are available for foreign entrepreneurs wishing to invest in Turkey.

6. Why do I need a local accountant for my Turkish business?
Even though the financial system in Turkey is straight-forward and there is a well established communication system with the public, it is advisable for a new company, especially foreign-owned to work with a local accountant. Tax fillings and all financial procedures are easily taken care of by a local accountant who has a better understanding of all the required procedures, and more experience in dealing with formalities.

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