Taxes in Turkey – A Complete Guide for Investors and Residents

Turkey is one of the most attractive countries for foreign investors, thanks to its strategic location, growing economy, and diverse real estate and industrial opportunities. However, before embarking on any investment activity or purchasing a property, it's essential to understand the Turkish tax system, which features a variety of types, including income, corporate, real estate, and inheritance taxes.

Knowing about taxes in Turkey helps you plan your finances properly and avoid any unexpected liabilities.

Taxes in Turkey

It is imposed on individuals who earn income within Turkey, whether from work or from other sources such as rent or business profits.

Income Tax Brackets 2025 - Taxes in Turkey

🔹 Non-residents of Turkey are only taxed on income earned within the country.

Corporate Tax

• It is imposed on the profits of companies operating in Turkey at a rate of 25% (may be adjusted according to the annual financial laws).
• Includes all companies, whether local or foreign, that make profits within Turkey.
• Foreign companies only pay tax on profits generated from their activities within Turkey.

Real estate taxes in Turkey

1. Property Ownership Tax (Tapu Vergisi)

• It is paid when registering the property in the Land Registry.
• Ratio: 4% of the property value , often divided between the seller and the buyer (2% for each party).

2. Annual property tax (Emlak Vergisi)

• Imposed annually on property owners.
• Ratio:
• 0.1% for homes.
• 0.2% for commercial properties.
• 0.3% for land.
• The percentage is doubled if the property is located within major cities (Istanbul, Ankara, Izmir).

3. Capital Gain Tax

• Imposed upon sale of property if sold within the first 5 years from the date of purchase.
• It is calculated according to income tax based on the value of the profit.
• If the ownership period exceeds 5 years, this tax is exempt .

4. Value Added Tax (VAT)

• A tax of 1% to 18% is imposed on the sale of new properties , depending on the property’s location and area.
• Foreigners can claim a KDV tax refund if they purchase a new property in foreign currency and do not use it as their primary residence.

5. Inheritance and Gift Tax

• Imposed on real estate, inherited property, or money given as a gift.
• The percentage ranges from 1% to 30% depending on the value of the inheritance or gift.
• It is paid in semi-annual installments over several years.

6. Other fees and taxes

• Environmental waste fees : added to the water bill on a quarterly basis.
• Stamp Duty : Imposed upon signing official contracts, at a rate of up to 0.948% of the contract value.
• Earthquake Insurance Tax ( DASK ) : Mandatory when purchasing any property.

Exemptions and facilities for foreigners

• Exemption from real estate profits tax when selling the property after 5 years.
• The possibility of recovering VAT when purchasing new properties under certain conditions.
• Double taxation agreements between Turkey and many countries prevent foreign investors from paying the same tax twice.

Taxes in Turkey: Clarity and Organization

Turkey's tax system may seem complex at first, but it is organized and transparent, providing investors with clarity regarding their financial obligations.

Whether you are a resident or a foreign investor, understanding the details of taxes helps you better manage your money and take advantage of available legal exemptions.

📌 To optimally plan your real estate investments in Turkey, it is recommended to consult specialized consultants such as Binaa Real Estate , who provide comprehensive tax and real estate consultations to ensure a safe and profitable investment process.

Sources

• Investment in Turkey
• immi grant invest