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Company Formation and Related Services

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Buying a European shelf company with VAT number

Whenever you need to start doing business immediately in a European country and you need a company with a VAT number, you don’t have to wait for the bureaucratic procedures.

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Partner Law Firms

We encourage you to contact our partner law firms in Bucharest: Rolegal and E&C, both part of our legal network.

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Tax Minimization Structures

BridgeWest is specialized in special corporate structures designed for tax minimization. No matter where you want to incorporate your company, you will need to consider how you can legally minimize costs.

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Paying Taxes in Turkey

April 4, 2011, 6:36 pm
BridgeWest

1. What is the corporate tax in Turkey?
The Turkish standard tax rate is 20% but certain incentives are granted, for example the incomes provided by software development are exempt from paying taxes until January 2024. Also major reductions may be granted for operating in certain regions.

2. What is the VAT in Turkey?
The Turkish VAT is usually 18%, but there are incentives granted to basic foodstuff, pharmaceutical products and other which are subject to an 8% rate and to the newspapers, magazine and some farm products which are subject to a VAT of 1% rate.

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. What are the taxes rates applied on other payments?

There is only a 10% withholding tax on interest paid on loans from nonresidents which are not financial entities. The rest of the interests are not taxable.

A withholding tax on royalties derived from sales or transfer of intangible assets have the value of 20%. The rest of the royalties are not subject to taxation.

The technical service fees are taxed with 20%. A 15% tax is imposed on branch remittances.


6. 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.

7. 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.

BridgeWest offers company formation in Turkey, including virtual office and other related services.




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