Turkey Tax Rates
Turkey operates a progressive personal income tax system with rates ranging from 15% to 40%, administered by the Revenue Administration. The standard corporate tax rate is 25%, and Turkey levies an 20% VAT as its standard rate. Turkey's tax system is largely aligned with European standards given its EU candidacy status, and the country has a comprehensive network of over 85 tax treaties. Social security contributions are significant, adding approximately 37% of salary in combined employer and employee contributions.
Top Income Tax Rate
40%
Corporate Tax Rate
25%
VAT / Sales Tax
20%
Capital Gains Tax
40%
Detailed Tax Information
Income Tax Brackets
Turkey imposes a progressive personal income tax with five brackets ranging from 15% to 40%. Tax residents are taxed on worldwide income, while non-residents are taxed only on Turkish-sourced income. Employment income brackets are more favorable, with higher thresholds for the lower rates. Turkey applies a withholding tax system for employment income, with annual reconciliation required for taxpayers with multiple income sources or income exceeding certain thresholds.
| Income Range | Tax Rate |
|---|---|
| ₺0 – ₺110K | 15% |
| ₺110K – ₺230K | 20% |
| ₺230K – ₺580K | 27% |
| ₺580K – ₺3.0M | 35% |
| ₺3.0M+ | 40% |
Corporate Tax
Turkey's corporate income tax rate is 25%, effective from 2023 onwards (increased from 20% pre-pandemic). All corporate income, including capital gains, is subject to this rate. A 5-percentage-point reduction applies to income derived from exports, production activities, and certain technology development zone activities. Companies operating in free trade zones may benefit from corporate tax exemptions on export-related manufacturing income.
Standard Rate
25%
Capital Gains Tax
Capital gains for individuals are generally included in taxable income and subject to the progressive income tax rates up to 40%. However, gains from the sale of real estate held for more than 5 years are fully exempt. Gains on securities may be subject to withholding tax or exempt depending on the type and acquisition date. For corporations, capital gains are included in taxable income at the standard 25% rate, with a 75% exemption available for shares held more than 2 years.
Rate
40%
VAT / Sales Tax
Turkey's VAT (Katma Değer Vergisi - KDV) has three rates: a standard rate of 20%, a reduced rate of 10%, and a super-reduced rate of 1%. The standard rate was increased from 18% to 20% in July 2023. Most goods and services are subject to the 20% rate. Exports are zero-rated. Certain essential items, agricultural products, and services benefit from the reduced rates. Financial and insurance transactions, healthcare, and education are exempt from VAT.
Standard Rate
20%
Cryptocurrency Tax
Turkey has not yet introduced specific tax legislation for cryptocurrency transactions. The Central Bank of Turkey banned the use of cryptocurrencies for payments in April 2021, but trading on exchanges remains legal. In the absence of specific crypto tax rules, gains from cryptocurrency trading could theoretically be subject to income tax under general principles, though enforcement has been limited.
Tax Treaties
Turkey has a comprehensive network of approximately 87 double taxation treaties covering most major trading partners. These treaties provide reduced withholding rates on cross-border dividends, interest, and royalties. Turkey has signed the OECD Multilateral Convention (MLI) and is implementing BEPS measures. The country also has bilateral social security agreements with over 30 countries.
Treaty Network
87
Double taxation agreements
Major treaty partners:
Key Details
Relocate to Turkey
See how much you could save by moving here from your current country.
$-5,638
Tax in United States
$24K
24.4% effective
Tax in Turkey
$30K
30% effective
Additional Cost
23.1%
more tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
