Agriculture in Turkey
What is Agricultural Enterprise? What is Commercial Income?

 

 

Income refers to the tangible or intangible benefit obtained by an individual, institution, or business.
In Turkey, agriculture, animal husbandry, and related businesses are the most important parts of the economy. The agricultural and livestock sector provides employment for hundreds of thousands of people. Agriculture is a crucial source of income for Turkey, both in terms of employment and meeting food needs.
As in every sector, employees in the agricultural sector, namely farmers, are taxed on the income they earn from the products they sell. They become taxpayers by being taxed on their earnings. So, what exactly is agricultural income, which is a taxable income? What are the differences between agricultural income and commercial income? You can find the answers to your questions in the rest of this article.

 

 

 

 

 

What is Agricultural Enterprise?

 

 An agricultural enterprise, most commonly known as an agricultural enterprise, is a type of enterprise that engages in agricultural and livestock activities. According to the agricultural enterprise income tax law: It refers to businesses that systematically and continuously engage in activities such as plant cultivation, animal husbandry, forestry, and aquaculture.
 The areas of activity of an agricultural business include field maintenance, viticulture, vegetable farming, fruit growing, livestock farming, beekeeping, and fishing. The business produces products or animal feed and converts them into commercial value. Production is carried out to generate income. An agricultural business is not a one-time production process, but rather a continuous activity.
 The income generated by agriculture and animal husbandry is called agricultural income. An agricultural business is the business in which this activity is carried out.
Agricultural activities are examined across a wide range of activities. All activities, such as growing wheat, corn, cotton, fruits, and vegetables, milk production, honey production, and animal husbandry, are considered agricultural activities. In addition, even if not cultivated on land, plants grown in greenhouses and silkworm rearing are considered agricultural activities. We observe that the agricultural sector has also changed with the development of technology. With the modernization of agriculture through technology, the range of agricultural activities has expanded considerably.

 

 

 

 

What is Agricultural Income?

 

As mentioned above, agricultural income refers to income derived from agricultural activities. Farmers, those who produce and sell wheat, corn, cotton, fruits, and vegetables on their own fields, beekeepers, those who produce and sell beeswax and pollen, and those engaged in dairy production, among others, earn agricultural income.

Individuals who earn agricultural income are subject to tax at a specific rate based on their activities. Whether a business is held liable for its agricultural income is determined by its activity. Farmers can be considered taxpayers for their agricultural income.

 

 

 

 

 

 

What is Commercial Income?

 

 

Income derived from the purchase and sale of goods or services, production, and commercial activities is called commercial income. Production, trading, and the operation of restaurants and grocery stores in factories are considered commercial income. According to income tax law, commercial income refers to income arising from any commercial or industrial activity. Commercial income is not a one-time activity, but a regular and systematic activity aimed at profit. Commercial income is also subject to income tax.

 

 

 

 

What are the Differences Between Agricultural and Commercial Income?

 

While the distinction between agricultural and commercial income can be confusing, they are distinct from each other in many different ways. Agricultural income refers to income generated from agricultural and livestock activities. Commercial income, on the other hand, refers to income generated from the trade of goods and services, including industry, production, and services.

The means of production for agricultural income are land, water, and natural resources. The means of production for commercial income are capital, labor, and technology. While the mode of operation in agricultural enterprises is largely dependent on nature and seasonality, the mode of operation in commercial enterprises varies according to market conditions.

For a more detailed understanding, let's give an example:
If a person engages in beekeeping and produces and sells honey, the income earned from these sales is called agricultural income. If a person buys and sells prepared honey that they do not produce themselves, the income earned from these sales is called commercial income. Correctly understanding and evaluating this difference is crucial for tax liability.