Turkey – Taxation of international executives

Taxation of international executives.

Taxation of international executives.


Overview and Introduction

The Turkish tax year is the calendar year. Turkish income is classified into seven categories. Income or receipts classified in these categories are taxable.

The maximum combined Turkish-income tax rate is 40 percent for employment income.

The official currency of Turkey is the Turkish New Lira (TRY).

Herein, the host country/jurisdiction refers to the country/jurisdiction to which the employee is assigned. The home country/jurisdiction refers to the country/jurisdiction where the assignee lives when they are not on assignment.

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Income Tax

Tax returns and compliance

When are tax returns due? That is, what is the tax return due date?

31 March.

What is the tax year-end?

31 December.

What are the compliance requirements for tax returns in Turkey?


Residents are not generally required to file income tax returns if they have only been income taxed through a withholding mechanism at source. Salaries paid to resident employees are taxed at source through a withholding mechanism and there is no filing requirement for this income.


Non-residents are not generally required to file income tax returns if they have only been income taxed through a withholding mechanism at source. Salaries paid to non-resident employees are taxed at source through a withholding mechanism and there is no filing requirement for this income. However, if an employee is paid by two employers in a calendar year and the payment made by the second employer exceeds a certain limit (TRY53,000 for year 2021, the employment income should be subjected to declaration regardless of the fact of whether it is already subjected to withholding or not. Taxes withheld will be credited against the taxes payable with respect to the tax return.

Tax rates

What are the current income tax rates for residents and non-residents in Turkey?

Residents and non-residents

For employment income for the year 2021:

Taxable income bracket

Tax rate on income in bracket

From TRY


















For other types of income for the year 2021:

Taxable income bracket

Tax rate on income in bracket

From TRY


















Residence rules

For the purposes of taxation, how is an individual defined as a resident of Turkey?

A resident is defined as an individual who have their domicile in Turkey, or whose presence in Turkey is for more than 6 months in a calendar year.

Is there a minimum number of days rule when it comes to residency start and end date? For example, a taxpayer can’t come back to the host country/jurisdiction for more than 10 days after their assignment is over and they repatriate.

Not applicable.

What if the assignee enters the country/jurisdiction before their assignment begins?

No special rules apply.

Termination of residence

Are there any tax compliance requirements when leaving Turkey?

An income tax may be required to be filed within 15 days before final departure from Turkey.

What if the assignee comes back for a trip after residency has terminated?

The assignee is not regarded as a resident.

Communication between immigration and taxation authorities

Do the immigration authorities in Turkey provide information to the local taxation authorities regarding when a person enters or leaves Turkey?

No special rules apply.

Filing requirements

Will an assignee have a filing requirement in the host country/jurisdiction after they leave the country/jurisdiction and repatriate?

The assignees should file special tax returns within 15 days before their departure.

Economic employer approach

Do the taxation authorities in Turkey adopt the economic employer approach to interpreting Article 15 of the OECD treaty? If no, are the taxation authorities in Turkey considering the adoption of this interpretation of economic employer in the future?

The taxation authorities in Turkey adopt the economic employer approach to interpreting Article 15 of the OECD treaty.

Minimum number of days

Are there a minimum number of days before the local taxation authorities will apply the economic employer approach? If yes, what is the de minimum number of days?

Not applicable.

Types of taxable compensation

What categories are subject to income tax in general situations?

As a rule, it can be stated that all types of compensation and benefits received by an employee for services rendered constitute taxable income regardless of where paid.

Typical items of an expatriate compensation package, which are fully taxable unless otherwise indicated, are as follows:

  • reimbursements of foreign and/or home country/jurisdiction taxes
  • school tuition reimbursements
  • cost-of-living allowances
  • housing allowances and housing provided
  • employer’s contributions to a foreign pension plan
  • reimbursement of moving expenses
  • the benefit of loans at reduced or zero interest rates provided by the employer
  • round sum expenses allowances
  • home leave
  • share option exercises: Turkish legislation taxes the exercise of an option but not the grant or vest of an option.

Intra-group statutory directors

Will a non-resident of Turkey who, as part of their employment within a group company, is also appointed as a statutory director (i.e. member of the Board of Directors in a group company situated in Turkey trigger a personal tax liability in Turkey, even though no separate director's fee/remuneration is paid for their duties as a board member?

Director’s fees are taxable in Turkey.

a) Will the taxation be triggered irrespective of whether or not the board member is physically present at the board meetings in Turkey?


b) Will the answer be different if the cost directly or indirectly is charged to/allocated to the company situated in Turkey (i.e. as a general management fee where the duties rendered as a board member is included)?


In the case that a tax liability is triggered, how will the taxable income be determined?

Tax-exempt income

Are there any areas of income that are exempt from taxation in Turkey? If so, please provide a general definition of these areas.

The following are not subject to tax:

  • the provision of a company car provided that the car is used for business purposes
  • premiums to a Turkish company for medical, dental, sickness, and disability plans up to a specified limit
  • contributions to social security scheme in the home country/jurisdiction within the upper limit applied in Turkey, if there is a totalization agreement between Turkey and the home country/jurisdiction
  • luncheon vouchers provided to employees, up to a certain daily limit and meals provided to the employees in the premises of the enterprise
  • lodging provided to laborers working in mines and factories and residences provided to the employees, whose gross areas do not exceed 100m2
  • the salaries paid by a non-resident employer from sources outside of Turkey. This exemption is specifically applicable for salaries of representative office (liaison office) employees.

Auto allowance

Taxable, if paid in-cash or personal use of a company car.

Premiums for medical, dental, sickness, and disability plans


Incentive compensation plan


Food allowance

Luncheon vouchers provided to employees, up to a certain daily limit. Meals provided to the employees in the premises of the enterprise.

Expatriate concessions

Are there any concessions made for expatriates in Turkey?


Salary earned from working abroad

Is salary earned from working abroad taxed in Turkey? If so, how?

If an individual is not resident in Turkey for tax purposes, the salary payments for working abroad are not taxable in Turkey, where the Turkish nationals are deemed a resident taxpayer, but work outside Turkey, their salaries attributable to their service outside Turkey is tax exempt provided that the salary is subject to income tax in the source country/jurisdiction and the Turkish nationals work there with work and residence permit.

Taxation of investment income and capital gains

Are investment income and capital gains taxed in Turkey? If so, how?

Capital gains of resident individuals are taxed as ordinary income. Non-Turkish investment income is taxable in Turkey, if the individual is resident in a calendar year. Certain exemptions may be relevant depending on certain circumstances including a holding period, type of the asset disposed of, and so on.

Immovable capital revenues: The immovable shall be situated in Turkey and goods and rights of this category shall be used and assessed in Turkey.

Movable capital revenues: The capital should be invested in Turkey.

Capital gains: The business or transaction having created this revenue or earning should be concluded or assessed in Turkey.

The term of assessment refers to the payment that has been made in Turkey or that has been transferred to the account of or deducted from the profit of the persons having made the payment or of the persons on whose behalf or account the payment has been in Turkey even if it has been made abroad.

The taxable amount is determined by indexing the capital gains with the producer price index announced by State Institute of Statistics. The month that the share is disposed will not be taken into account. In order to apply indexing, the rate of increment should be at least 10 percent.

Dividends, interest, and rental income


Taxable if dividends are paid by a resident company.


Taxable if the interest is derived from a source (that is capital, principal, and so on) invested in Turkey.

Rental income

The immovable from which the rental income is derived shall be situated in Turkey and goods and rights of this category shall be used and assessed in Turkey.

Gains from stock option exercises

Residency status

Taxable at:













Other (if applicable)




Foreign exchange gains and losses


Principal residence gains and losses


Capital losses

The capital losses would not be offset from your other individual income.

Personal use items

If the employer provides such items to an employee, they will be regarded as benefit-in-kind and taxable as an employment income.


Subject to inheritance tax.

Additional capital gains tax (CGT) issues and exceptions

Are there additional capital gains tax (CGT) issues in Turkey? If so, please discuss?


Are there capital gains tax exceptions in Turkey? If so, please discuss?

Pre-CGT assets

For the year 2019, TRY19,000 of the capital gains derived from disposal of immovable assets is exempt from income tax.

Also, depending on the holding periods of the immovable assets and shares the capital gains might be tax exempt.

Deemed disposal and acquisition

Information is not available.

General deductions from income

What are the general deductions from income allowed in Turkey?

The following items of expenditure may be deducted from taxable income:

  • pension contributions
  • charitable contributions up to certain limits.

Effective from 1 January 2008, minimum subsistence allowance has been applied. Accordingly, the amount is calculated by multiplying the rate applying to the first income tax bracket of the income tax tariff with 50 percent for the taxpayer, 10 percent for their spouse not working or not having any income, 7.5 percent for the first two children and 5 percent for each of the children remaining, of the annual gross amount of the minimum wage amount when the wage is earned, for the employees who are above 16 and working in the industrial sector; then this amount shall be deducted from the income tax to be calculated over the wage.

Tax reimbursement methods

What are the tax reimbursement methods generally used by employers in Turkey?

The following are the normal methods of recognizing tax reimbursements paid by the employer:

  • current year gross-up
  • current year reimbursement
  • loan/bonus.

Payment in-cash is deducted from withholding tax liability.

Calculation of estimates/prepayments/withholding

How are estimates/prepayments/withholding of tax handled in Turkey? For example, Pay-As-You-Earn (PAYE), Pay-As-You-Go (PAYG), and so on.

Withholdings are applied at the prevailing rates when the salary is accrued or paid.

Pay-as-you-go (PAYG) withholding

Not applicable in Turkey.

PAYG installments

Not applicable in Turkey.

When are estimates/prepayments/withholding of tax due in Turkey? For example: monthly, annually, both, and so on.

Employers file withholding tax return and pay the tax due monthly basis. However, if an employer has 10 or less employees, they can file the withholding tax return quarterly.

Relief for foreign taxes

Is there any Relief for Foreign Taxes in Turkey? For example, a foreign tax credit (FTC) system, double taxation treaties, and so on?

Other than the provisions stated in the double tax treaties, Turkish tax legislation also provides a foreign tax credit for residents where Turkey taxes foreign-sourced income up to the Turkish tax due on the same source of income if the certain requirements are satisfied.

General tax credits

What are the general tax credits that may be claimed in your country/jurisdiction? Please list below.

  • Withholding tax.
  • Foreign taxes under certain conditions.
  • Social security contributions.
  • Contributions to private health/pension/life insurances within certain limits.
  • Certain donations (depending on the nature of the donations, there might be certain limits or without limits).
  • Up to 10 percent of the income declared, the health and education expenses incurred for the taxpayers, their spouses and dependent children provided that they expenses should be substantiated by means of invoice or receipt received from Turkish resident suppliers.


1 Certain tax authorities adopt an "economic employer" approach to interpreting Article 15 of the OECD model treaty which deals with the Dependent Services Article. In summary, this means that if an employee is assigned to work for an entity in the host country/jurisdiction for a period of less than 183 days in the fiscal year (or a calendar year of a 12-month period), the employee remains employed by the home country/jurisdiction employer but the employee’s salary and costs are recharged to the host entity, then the host country/jurisdiction tax authority will treat the host entity as being the "economic employer" and therefore the employer for the purposes of interpreting Article 15. In this case, Article 15 relief would be denied, and the employee would be subject to tax in the host country/jurisdiction.

2 For example, an employee can be physically present in the country/jurisdiction for up to 60 days before the tax authorities will apply the ‘economic employer’ approach

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Special considerations for short-term assignments

For the purposes of this publication, a short-term assignment is defined as an assignment that lasts for less than 1 year.

Residency rules

Are there special residency considerations for short-term assignments?

There is no special residency consideration for short-term assignments. General rules are applicable.

Payroll considerations

Are there special payroll considerations for short-term assignments?

There is no special payroll consideration for short-term assignments. General rules are applicable.

Taxable income

What income will be taxed during short-term assignments?

Depending on their residency status, their worldwide income or their income attributable to Turkey as well as, the Turkey-sourced income are taxable.

Additional considerations

Are there any additional considerations that should be considered before initiating a short-term assignment in Turkey?

No specific considerations on this matter.

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Other taxes and levies

Social security tax1

Are there social security/social insurance taxes in Turkey? If so, what are the rates for employers and employees?

Employer and employee

Type of insurance

Paid by employer

Paid by employee


Short-term social security contributions




Disability, old age, death




General health insurance












All employees, including foreign nationals, are subject to compulsory social security. Only the application of unemployment insurance is exceptional for a foreigner, depending on the existence of reciprocal provisions between their home country/jurisdiction and Turkey. On the other hand, in the case where an assignee remains in the social security system in the home country/jurisdiction and substantiates their social security coverage through a document received from the competent authority in their home country/jurisdiction, they are not subject to social security in Turkey.

Contributions are payable by both the employer and the employee based on the employee’s salary. The rates stated above are applied to the gross total of salaries, wages and bonuses up to a current maximum monthly of TRY19,188.00 for the whole year 2019. In calculating the income withholding tax on the wages by the employer, the employee contribution is deducted from the withholding tax base.

Gift, wealth, estate, and/or inheritance tax2

Are there any gift, wealth, estate, and/or inheritance taxes in Turkey?

There is no wealth tax in Turkey.

The free transfer of title to property (immovable or movable) is potentially subject to inheritance and transfer tax. Tax rates vary between 1 percent and 30 percent.

The sale of immovable property is subject to a title deed registration fee at 1.5 percent on the sale price. Both the seller and the purchaser are liable to pay the 1.5 percent separately.

Real estate tax

Are there real estate taxes in Turkey?

Building and land tax are taxes imposed by the real estate tax law. The tax base is the fair market value and it may be less than the value calculated in accordance with certain criteria set for each region. The rate of building tax is 0.2 percent (0.1 percent on residences) and the rate of land tax is 0.1 percent (0.3 percent on building sites). Land taxes are applied as twice of the standard rate in some cities. There is also environment tax payable to local municipalities whose filing and payment dates are attached to those of building and land taxes.

Sales/VAT tax

In Turkey, delivery of goods and services with respect to commercial, industrial, agricultural and independent professional activities, and importation of goods and services are subject to VAT:

  • general: 18 percent
  • basic food stuff, textile products, and so on: 8 percent
  • certain agricultural products, financial leasing services, and so on: 1 percent.

Unemployment tax

Are there unemployment taxes in Turkey?

In Turkey, both employees and employers are subject to unemployment insurance at a rate of 1 percent and 2 percent. The rates are applied to the gross total of salaries, wages, and bonuses up to a current maximum monthly of TRY19,188.00 for the whole year 2019.

Other taxes

Are there additional taxes in Turkey that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.

The remunerations paid through payroll are subject to 7.59 percent stamp duty on their gross amount.

Foreign Financial Assets

Is there a requirement to declare/report offshore assets (e.g. foreign financial accounts, securities) to the country/jurisdiction’s fiscal or banking authorities?

 Yes, in case Turkish tax residents have offshore assets which is not subject to any withholding or exemption in Turkey, such income needs to be reported. The limit for submitting a declaration for the withholding and immovable and real estate capital earnings that are not subject to withholding and exemption in the first paragraph (1) of the first paragraph of Article 86 of the Income Tax Law has been determined as 2,800 TL to be applied to the income of the calendar year 2021.


1 Turkish Social Security Code (The Code 506).

2 Turkish Gift and Inheritance Tax Code (The Code 7338), Turkish Fees Code (The Code 492).

3 Turkish Real Estate Tax Code (The Code 1319).

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Following is an overview of the concept of Turkey’s immigration system for skilled labor.

(E.g. which steps are required, authorities involved, in-country/jurisdiction and foreign consular processes, review/draft flow chart illustrating the process)

Foreign individuals who will be employed in Turkey are required to obtain a work permit. Work permit applications are made by the employer, following an initial visit to the work visa application at a Turkish Consulate abroad. Work permit applications are made to the Ministry of Labor and general processing times are between 4 to 6 weeks. Following the approval, the individual needs to revisit the consulate and obtain single entry work visa and collects the work permit card in Turkey.

International Business Travel/Short-Term Assignments

Describe (a) which nationalities may enter Turkey as non-visa national, (b) which activities they may perform and (c) the maximum length of stay.

Depending on their nationalities, foreign individuals may enter Turkey without a visa for touristic or business purposes or may be required to obtain an e-visa. The maximum length of stay also depends on the nationality of the individual. A comprehensive list of nationalities and terms & conditions of visiting Turkey can be found at http://www.mfa.gov.tr/visa-information-for-foreigners.en.mfa

Permitted activities for individuals who have a business / commerce visa are generally as follows:

  • Attending meetings & conferences with colleagues, clients or customers,
  • Participating in training,
  • Developing business contacts,
  • Advertising and market research
  • Collecting data, reviewing work related issues, etc.

Describe (a) the regulatory framework for business traveler being visa nationals (especially the applicable visa type), (b) which activities they may perform under this visa type and the (c) maximum length of stay.

Please see above.

Outline the process for obtaining the visa type(s) named above and describe (a) the required documents (including any legalization or translation requirements), (b) process steps, (c) processing time and (d) location of application.

The Electronic Visa (e-Visa) Application System was launched on 17 April 2013 by the Ministry of Foreign Affairs of the Republic of Turkey. This system allows visitors travelling to Turkey to easily obtain their e-Visas online (www.evisa.gov.tr), in approximately three minutes.

It is possible to obtain e-Visa 7/24 at everywhere with internet connection. The applicants can obtain their visa after they fill in the necessary information concerning their identity, passport and travel dates and pay visa fee online.

Required documents may vary depending on the nationality of the individual. However, for all applications the individual needs to carry a passport or a travel document as a substitute for passport with an expiration date at least 60 days beyond the “duration of stay” of their visa and biometric photos. Required documents are indicated during the online application process.

Individual from some nationalities may be required to visit the competent Turkish Consulate in order to obtain a visa.

Are there any visa waiver programs or specific visa categories for technical support staff on short-term assignments?

A special visa type, “assembly, maintenance and service visa”, may be issued for up to 90 days in a year under certain conditions, to engage in assembly, maintenance, service, or technical training work for the benefit of a Turkish company without the need for a work permit. 

Long-Term Assignments

What are the main work permit categories for long-term assignments to Turkey? In this context outline whether a local employment contract is required for the specific permit type.

There is a single type of work permit for foreign employees. A local employment contract is required for obtaining a work permit, however in terms of assignments an assignment letter may also be sufficient.

Provide a general process overview to obtain a work and residence permit for long- term assignments (including processing times and maximum validation of the permit).

  • The employee applies for the work visa from the nearest Turkish Embassy/Consulate to obtain work visa reference number and provides the number to the employer.
  • The employer makes the work permit application via online system using the reference code provided by the Embassy.
  • Ministry of Labor evaluates the application and notifies the employer regarding the outcome. If the required documents are submitted properly, the legal processing time for evaluation is 30 days.
  • After the approval, the individual revisits the Embassy to receive single entry work visa. Meanwhile the work permit fees must be paid by the employer.

Work permit is initially issued for 1 year. Upon renewal, the work permit is issued for 2 years.

Is there a minimum salary requirement to obtain a long-term work and residence permit for assignments? Can allowances be taken into account for the salary?

There are minimum salary requirements depending on the job title / position of the individual. These requirements are:

a) 6.5 times the minimum wage for senior executives and pilots, as well as for engineers and architects applying for a preliminary permit

b) 4 times the minimum wage for line or branch managers, as well as for engineers and architects

c) 3 times the minimum wage for persons to be employed in occupations requiring expertise and proficiency, as well as for teachers, psychologists, physiotherapists, musicians and performing artists

d) Minimum wage for foreigners to be employed in household services, and 1.5 times the minimum wage for foreigners to be employed in occupations other than the aforementioned ones (e.g. salesperson, marketing-export officer, etc.)

e) 2 times the minimum wage for foreigners to be employed in tourism-animation organization companies as acrobats or in similar occupations, as well as for foreigners to be employed as masseurs, masseuses and SPA therapists.

Is there a fast-track process which could expedite the visa/ work permit?


At what stage is the employee permitted to start working when applying for a long-term work and residence permit (assignees/ local hire)?

The employee is permitted to start working once the work permit is approved & necessary social security declarations are made by the employer.

Can a short-term permit/ business visa be transferred to a long-term permit in Turkey ?

No, a work permit application is a separate process and it is initiated via competent Turkish Embassy abroad.

Is it possible to renew work and residence permits?

It is possible to renew work and residence permits. The renewal applications must be completed before the expiration date of prior permit.

Is there a quota or system or a labor market test in place?

The employer must employ five Turkish nationals for every foreign individual. An exemption may be granted by authorities for certain projects following an official application. Furthermore, the employer needs to fulfill one of the following conditions:

  • Paid-in capital of the company must be above 100,000 Turkish New Lira (TRY),
  • Gross sales of the company must be above TRY800,000, or\
  • Amount of previous year export sales must be above 250,000 US dollars (USD).

General Immigration Related Questions

Would it be possible to bring family members to Turkey?

Dependents may accompany an individual possessing a work permit by obtaining a residence permit.

Is it possible to obtain a permanent residence permit?

It is possible to apply for & obtain a permanent residence permit after residing in Turkey (with a residence permit) for 8 years.

What if circumstances change after the Work and Residence application process (e.g. change of employment or personal situation, including job title, job role or salary)?

If there are any changes while the application is under review, the authorities should be informed, and the application needs to be updated. After obtaining the work permit, there will be no need for an amendment or a new application unless the salary is reduced below the minimum requirement or if the individual will work for a new employer.

How long can a permit holder leave Turkey without their permit becoming invalid?

There is no such limit applicable for work permit. Residence permit holders must not spend more than 120 days abroad.

Must immigration permissions be cancelled by the end of the assignment/employment?

The authorities must be informed in 15 days upon the conclusion of assignment / employment.

Are there any penalties for individuals and/or companies in place for non-compliance with immigration law?

The monetary fines for failing to comply with immigration law are indicated below (for 2019):

  • TRY784.00 imposed on an employer or a self-employed foreigner who does not fulfill the notification requirement after termination / conclusion of employment)
  • TRY4,716.00 imposed on a foreigner employee who works without a work permit
  • TRY11,796.00 imposed on an employer (or employer representatives) for each foreign employee illegally employed
  • TRY9,438.00 imposed on a self-employed foreigner who works without work permit and their workplace will be closed down.

If a second violation is made by the foreign employee or the employer, the applicable penalty fees will double for the second offence. Furthermore, foreigners working without a work permit shall be notified to Ministry of Interior in order to be deported. Under Article 23(9), employers are also liable for the travel, accommodation and medical expenses for the illegal worker and their dependents with regards to deportation.

Other Important Items

List any other important items to note, or common obstacles faced, in Turkey when it comes to the immigration processes.

The work permit applications are made online using the application portal of the Ministry of Labor. Before making the application, a company profile must be set up on the system for one time only. Since there is a number of corporate documents required for this step along with an authorization from the responsible person from the company, we advise starting the process approximately a week in advance than originally planned.

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All information contained in this publication is summarized by KPMG Yeminli Mali Müşavirlik A.Ş., the Turkish member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on The Turkish Income Tax Code no. 193, Turkish Social Security Code no. 5510, Turkish Gift and Inheritance Tax Code no. 7338 and Turkish Fees Code no. 1319.