Thinking of living, working, or investing in Turkey? Understanding taxes in Turkey for foreigners is crucial to avoiding costly mistakes and optimizing your finances. Whether you’re earning income locally or abroad, Turkey’s tax obligations depend on your residency status, income type, and property holdings.
While Turkey’s tax rates are often lower than those in Western Europe, the system can be intricate, especially for expatriates and foreign investors. This guide breaks down everything you need to know about Turkey’s income tax, property tax, and corporate tax, helping you stay compliant and financially confident.
Here’s what you’ll learn:
Who pays taxes in Turkey?
Turkey has a residency-based tax system. This means you only pay tax on your worldwide income if you are a tax resident of Turkey.
- Tax residents: You are considered a tax resident if you stay in Turkey for 183 days or more in a calendar year, whether continuously or not. Your immigration status does not affect this; only the number of days you spend in the country. This is important if you plan to apply for Turkey’s Citizenship by Investment program. Tax residents of Turkey must pay taxes on their worldwide income, including earnings from outside Turkey.
- Non-tax residents: If you stay in Turkey for less than 183 days in a calendar year, you are a non-resident for tax purposes. Non-residents only pay local income taxes on income earned in Turkey, not on income from other countries. For companies, if the head office is in another country, the company is a non-resident taxpayer, even if it earns income in Turkey.
Personal Tax Rates in Turkey
Individual income tax rates in Turkey are based on a progressive income tax system with rates ranging from 15% to 40%, depending on taxable income levels. The rates are structured as follows:
| Annual income | Turkey income tax rate |
|---|---|
| Up to TRY 32,000 ($931) | 15% |
| Between TRY 32,001 and TRY 70,000 ($931-$2,037) | 20% |
| Between TRY 70,001 and TRY 150,000 ($2,037-$3,765) | 27% |
| Between TRY 150,001 and TRY 880,000($2,037-$25,613) | 35% |
| Income exceeding TRY 880,000 ($25,613) | 40% |
Subjects for personal income tax in Turkey
Based on income tax law, individual income tax in Turkey 2025 can come from a range of sources, including:
- Agricultural profits: Profits from agricultural activities, including planting, hunting, fishing, cultivating, etc.
- Pensions: Disability, retirement, orphan pensions etc.
- Income from business: All industrial or commercial activities carried out in permanent establishments.
- Wages: Salaries and wages from an employer-employee relationship.
- Capital investment: Dividends, interest, rent etc. (Subject to withholding tax).
- Independent personal services income: Turkey taxes for freelancers applies to all freelance services.
- Immovable property: Income resulting from land, buildings, quarries and mines, machinery installations, copyrights, trademarks, and vehicles (aircrafts, ships etc.).
- Non-recurrent income: Earnings that don’t recur regularly, generally one-off events.
Social security contributions in Turkey are also something to consider. Generally, the employer is liable for 20.5% of the salary, while the employee pays 14%. However, expat taxes dictate that foreign nationals receive an exemption period of three months on Turkish social security premiums from the employment start date.
While there is a range of options for a Turkey income tax calculator, working with a tax specialist is highly advisable to ensure you understand what taxes you are liable for in Turkey.
Corporate Tax Rates in Turkey
Corporate tax in Turkey is currently set at 25%, an important consideration for those thinking of starting a business in Turkey. The Turkey corporate tax rate applies to most companies; however, a higher rate of 30% applies to financial institutions such as banks and insurance companies.
Turkey Free Zones
Turkey’s Free Zones are designated areas inside the country that operate with special rules to encourage trade and investment. Businesses in these zones can import, produce, and export goods without paying VAT or customs duties.
Located near major ports and key markets—such as Istanbul, Mersin, and the Aegean region—these zones make it easier and cheaper for companies to run international operations. They are designed to boost exports, attract foreign investors, and support technology-focused industries.
Here are the 18 free zones in Turkey:
| Free Economic Zone | Location |
|---|---|
| Adana Hacı Sabancı OSB (Organized Industrial Zone) | Adana |
| Aegean Free Zone (Ege Serbest Bölgesi) | İzmir |
| Bursa Free Zone | Bursa |
| Çorlu Free Zone | Tekirdağ |
| Derince Free Zone | Kocaeli |
| Gaziantep Free Zone | Gaziantep |
| İstanbul Atatürk Airport Free Zone | Istanbul |
| İstanbul Trakya Free Zone | İstanbul |
| İzmir Free Zone | İzmir |
| Kocaeli Free Zone | Kocaeli |
| Mersin Free Zone | Mersin |
| Orhangazi Free Zone | Bursa |
| Samsun Free Zone | Samsun |
| Tuzla Free Zone | İstanbul |
| Yalova Free Zone | Yalova |
| Antalya Free Zone | Antalya |
| Çanakkale Free Zone | Çanakkale |
| Denizli Free Zone | Denizli |
VAT Rates in Turkey
The standard value-added tax (VAT) rate (sales tax in Turkey) is 20%. There are reduced VAT rates for certain products, including:
| Rate | Category | Examples of Goods or Services |
|---|---|---|
| 20% | General VAT | Applies to most everyday products and services, such as household appliances, home furnishings, consultancy services, entertainment services, and digital subscriptions. |
| 10% | Reduced VAT | Covers selected items including staple foods (like poultry, grains, and vegetables), clothing and accessories, school-related services, and many health-related goods. |
| 1% | Super-Reduced VAT | Used for essential items such as basic bread varieties, printed publications, specific farm products, and certain types of residential housing. |
There is also a special consumption tax category for certain industries and products. This special consumption tax is collected once and is applicable to the following:
- Alcohol, sugar drinks, and tobacco products
- Petroleum-based products
- Vehicles (Land, sea, and air)
- Luxury products (phones, caviar, furs, household appliances etc.)
Capital Gains Tax in Turkey
For non-residents of Turkey, capital gains tax only applies to assets within Turkey. Foreign investments generally do not fall under capital gains tax in Turkey.
Assets within Turkey that are sold and earn a profit are taxed, but it depends on how long the asset has been held and the type of asset. Here are some examples:
- Real estate: If you have owned a Turkish property for over five years, capital gains from the sale are exempt. If you sell the property within five years you are liable for the capital gains, which range from 15%-40%.
- Stocks and bonds: Short term holdings (under one year) are taxed based on the income bracket of the individual seller. Securities traded on the Istanbul Stock Exchange are exempt if they are held for over one year.
Inheritance Tax in Turkey
In Turkey, inheritance tax is charged when someone receives property or assets after a person dies. Turkey’s inheritance tax rates range from 1% to 30%, depending on the value of what is inherited and how close the heir is to the deceased. Foreigners who inherit property in Turkey must also pay this tax.
Some gifts or property transfers, however, may not be taxed. Turkish inheritance law treats everyone the same, whether you have Turkish citizenship or are a foreigner.
You usually have up to three years from the date of death to pay the inheritance tax.
Turkey Property Taxes
If you are thinking about buying property in Turkey, it is essential to understand property tax in Turkey for foreigners and residents. Turkish property taxes are as follows:
| Item | Tax |
|---|---|
| Property Purchase Tax | 4% |
| VAT | 1% (up to 150 m²) or 18% (larger than 150 m² or commercial real estate) |
| Annual Property Tax | 0.1%-0.3% (residential properties) 0.2%-0.4% (commercial properties) |
| Capital Gains Tax | 15% if sold before 5 years |
| Stamp Duty | 0.948% of the value of the property contract |
| Inheritance and Gift Tax | 1%-30% (depending on the value and the relationship of the inheritor or gift receiver to the deceased or donor) |
Turkey Crypto Taxes
Crypto is quickly becoming one of the most popular ways to invest across the globe. In fact, Turkey ranks as the 15th best nation for crypto attractiveness and adoption according to our Global Intelligence Unit report on cryptocurrency.
However, as of 2025, the Turkish Government does not have a specific taxation network for cryptocurrencies. That being said. Generally, crypto transactions in Turkey are seen as capital gains and may be subject to personal or corporate income tax depending on the nature of the transaction.
It is essential for those trading cryptocurrencies in Turkey to know which transaction types are taxed and how this may affect determining taxable income.
Double Tax Treaties in Turkey
Turkey has signed more than 80 Double Tax Treaties (DTTs) with countries worldwide, including major economies like the United States, United Kingdom, Germany, France, China, and Russia. These treaties are designed to prevent the same income from being taxed twice, making it easier for individuals and businesses to engage in cross-border trade and investment.
How to File Taxes in Turkey
Filing taxes in Turkey for foreigners often requires professional help to ensure compliance with Turkish regulations.
To file taxes individuals, and businesses must follow these steps:
- Step One: Get a Tax ID (TIN): Everyone doing business or earning income in Turkey needs a Tax Identification Number, which you can get from a local tax office or online with your passport.
- Step Two: Check your residency status:
- Residents (living in Turkey for more than six months) pay tax on income from anywhere in the world.
- Non-residents only pay tax on income earned in Turkey.
- Step Three: Prepare your documents: Collect income statements, receipts, invoices, and any rental or financial records.
- Step Four: File online: Taxes are usually filed electronically through the Turkish Revenue Administration. You’ll need a user ID and password from the tax office.
- Step Five: Pay your taxes: Payments can be made online, by bank transfer, or in cash at tax offices or partner banks in Turkey.
Tax Benefits in Turkey
Turkey provides a variety of tax incentives for both individuals and businesses, aimed at promoting investment, innovation, and international trade.
For businesses and investors:
- R&D and technology zones offer tax exemptions, deductions, and government support for employee salaries.
- Investment incentives include reduced corporate tax rates, VAT and customs exemptions, and help with social security contributions.
- Foreign income, such as dividends and profits from overseas construction projects, may qualify for exemptions.
- Double taxation treaties prevent the same income from being taxed twice, supporting foreign investors.
For individuals:
- Foreign pensions can be exempt under applicable double taxation agreements.
- Capital gains from shares held longer than two years, and certain rental income, may be tax-free.
- Deductions are available for education, health, insurance, and charitable donations.
- Foreign tax credits let residents offset taxes paid abroad against their Turkish tax liability.
These benefits make Turkey an attractive environment for both global investors and residents looking to optimize their taxes.
Becoming a Turkish Taxpayer: Pathway to Citizenship
The Turkey Citizenship by Investment program is a popular option for foreign nationals who want to live in Turkey. There are various ways to invest in Turkey, including:
- Purchase real estate: Buy property in Turkey valued at a minimum of $400,000.
- Fixed capital investment: Make an investment of at least $500,000 in a Turkish company.
- Bank deposit: Deposit a minimum of $500,000 in a Turkish bank account.
- Government bonds: Invest at least $500,000 in Turkish government bonds.
- Investment in fund shares: Place a minimum of $500,000 in a real estate or venture capital investment fund.
- Job creation: Create employment for at least 50 people in Turkey.
One of the main benefits of the Turkey Citizenship by Investment program is that you can obtain a Turkish passport in as little as four months.
Additionally, Turkey is a good option for those that want to live in Turkey part time with a holiday home without spending more than 183 days in the country to avoid taxation in Turkey for foreigners. Plus, with double taxation treaties with 85 countries, you won’t be taxed twice.
How Can Global Citizen Solutions Help You?
Global Citizen Solutions is a boutique migration consultancy firm with years of experience delivering bespoke residence and citizenship by investment solutions for international families. With offices worldwide and an experienced, hands-on team, we have helped hundreds of clients worldwide acquire citizenship, residence visas, or homes while diversifying their portfolios with robust investments.
We guide you from start to finish, taking you beyond your citizenship or residency by investment application.
