If you own a business, you are required to pay income tax in Turkey in 2025 both on your own behalf and on behalf of your employees’ earnings. In this case, it is beneficial to be mindful when preparing tax returns and planning payments. By making a good expense plan, you can smoothly pay your taxes and ensure that your business fulfills its obligations. To gain detailed information about these payments, you can continue reading this article, which serves as an income tax guide.
What is Income Tax in Turkey ?
Income tax in Turkey in 2025 is an obligation paid to the government by individuals and institutions on the earnings they acquire over a specific period. In Turkey, income tax is levied on personal earnings and is applied at different rates depending on the type of income.
Calculating income tax involves determining annual earnings, establishing the taxable base, and computing the tax amount based on the applicable rate. The amount of income tax may vary depending on financial status, profession, and other factors. Income tax is a significant source of revenue for financing public expenditures.
Additionally, for a business to continue its operations smoothly, it is essential to make tax payments regularly. Failure to file tax returns and make payments on time can lead to various penalties, which could create problems for both the business and the employer.
What is Tax Revenue?
A certain financial resource is necessary to sustain public services. These resources mainly consist of taxes. For this reason, everyone living in a country and earning income has various tax obligations. Payments determined directly based on earnings are known as income tax.
A significant portion of a country’s budget consists of taxes. These payments are organized according to different activities and income sources. For example, the taxes required for acquiring a motor vehicle and those on commercial earnings differ. Commercial activities, salaries received for labor, and income from owned properties are subject to income tax.
What are the Components of Income?
Before listing the components of income, it is helpful to define the concept. Money that regularly comes from specific sources to an individual or group is considered income. The profit obtained through your company is part of your income. The components of income, as defined by the Income Tax Law (GVK), are as follows:
- Commercial earnings
- Agricultural earnings
- Salaries
- Self-employment income
- Rental income from real estate (capital gains)
- Capital investment income
- Other earnings and revenues
According to 2019 data (in Turkish), income tax based on declarations constituted 13% of the budget. This makes income tax one of the significant sources of revenue for the budget. Anyone earning registered income is obligated to pay this tax. Therefore, tax payments should be planned simultaneously with earnings.
Who are the Income Taxpayers? Who Pays Income Tax?
The individuals who are subject to tax obligations are explicitly stated in Article 4 of the Income Tax Law (in Turkish). This article defines taxpayers as:
- Those residing in Turkey,
- Those who stay in Turkey for more than six months in a calendar year,
- Turkish citizens residing abroad due to assignments in official institutions, organizations, or businesses with headquarters in Turkey.
Anyone residing in Turkey and having an income source is required to pay income tax. Individuals and institutions earning income in Turkey while residing abroad are also subject to this tax. These individuals are referred to as “limited taxpayers.” Foreign companies operating in Turkey also fall under this category.
To summarize, full taxpayers include:
- Those whose residence is in Turkey,
- Those who have continuously stayed in Turkey for at least six months in a year,
- Turkish citizens whose businesses are headquartered in Turkey but operate abroad.
Do Self-Employed Individuals Pay Income Tax in Turkey (2025) ?
Yes, self-employed individuals are subject to income tax. The obligation to file a tax return applies even when there is no income. The “Tax Procedure Law No. 213” requires self-employed individuals to maintain records. If there is no income, filing a tax return is sufficient. The amount payable varies based on annual earnings.
How is Income Tax Deducted?
Income tax is a type of tax calculated based on profit. In other words, the tax amount to be paid is flexible and is determined directly according to income. Annual profit margins are taken into account in these payments. The taxation process is carried out based on the calculated earnings. Procedures such as filing tax returns and installment payments are determined accordingly.
The type of taxpayer plays an important role in determining income tax. There may be differences in taxation between commercial enterprises and individuals earning rental income. In some cases, tax reductions may be granted under government incentives. Accordingly, these taxes are determined annually based on the taxpayer’s situation.
What are the 2025 Income Tax Brackets?
Income tax brackets are crucial in determining the amount of payments and declaration procedures. Income tax calculations are made based on the income brackets established. These parameters indicate the percentage of your earnings you need to pay. The payments you are required to make vary based on your annual income. Your income type may also affect which bracket you fall into.
Income Tax Brackets for Salaried Earnings:
| Income Bracket | Tax Rate |
|---|---|
| Up to 158,000 TL | 15% |
| 158,000 TL – 330,000 TL | 23,700 TL for the first 158,000 TL, plus 20% on the excess |
| 330,000 TL – 1,200,000 TL | 58,100 TL for the first 330,000 TL, plus 27% on the excess |
| 1,200,000 TL – 4,300,000 TL | 293,000 TL for the first 1,200,000 TL, plus 35% on the excess |
| Over 4,300,000 TL | 1,378,000 TL for the first 4,300,000 TL, plus 40% on the excess |
Income Tax Brackets for Non-Salaried Earnings:
| Income Bracket | Tax Rate |
|---|---|
| Up to 158,000 TL | 15% |
| 158,000 TL – 330,000 TL | 23,700 TL for the first 158,000 TL, plus 20% on the excess |
| 330,000 TL – 800,000 TL | 58,100 TL for the first 330,000 TL, plus 27% on the excess |
| 800,000 TL – 4,300,000 TL | 185,000 TL for the first 800,000 TL, plus 35% on the excess |
| Over 4,300,000 TL | 1,410,000 TL for the first 4,300,000 TL, plus 40% on the excess |
If you want to learn more details about income tax rates, you can read our article titled “2025 Tax Brackets.”
How is 2025 Income Tax Calculated?
Income tax rates vary depending on the amount of earnings. The taxation rates for 2025 are listed above. Based on these rates, the calculation is as follows:
- If taxable non-salaried income is 100,000 TL, the tax due is (100,000 x 15%) = 15,000 TL.
- If taxable non-salaried income is 200,000 TL, the first 158,000 TL is taxed at 23,700 TL, and the remaining 42,000 TL is taxed at (42,000 x 20%) = 6,400 TL, making the total tax 32,100 TL.
- If taxable non-salaried income is 300,000 TL, the first 158,000 TL is taxed at 23,700 TL, and the remaining 142,000 TL is taxed at (142,000 x 20%) = 28,400 TL, making the total tax 52,100 TL.