Businesses in Türkiye and the Types of Taxes They Relate to

We experience great excitement when starting a business. When building your dream business, you must proceed with precision and confidence. There are many steps involved in starting a business from scratch. The key is to research and plan before starting the process.

Another important issue after a company is established is the type of taxes it will be subject to. Every business has tax obligations or tax returns to file after its inception.

You can learn which tax types or declarations your company you want to establish or your existing company is responsible for in our article below.

Basic Tax Responsibilities of Businesses in Turkey

 

To continue operating and avoid penalties, businesses must complete their taxes and declarations regularly and completely. These responsibilities vary depending on the specifics of the business. Businesses must fulfill their responsibilities by filing their declarations on time. In this way, businesses must submit all their declarations transparently and on time. This is a crucial detail for determining their responsibilities and is advantageous for the business.

 

Stamp Duty and Stamp Duty Declaration Process

Stamp duty is the first tax a business is responsible for after its incorporation. As stated in Articles 1 and 2 of Law No. 488, written documents are subject to stamp duty.

The process of establishing a company begins when businesses lease their workplaces. After incorporation, the business's stamp duty liability begins with the creation of the workplace lease and financial advisor service agreement. This tax is collected from documents documenting other legal and official transactions during the business's operations . A separate stamp duty is calculated for each such document. Stamp duty must be declared and paid within the 26th day of the month following the due date. Interest and penalties may apply for late payment.

 

 

Withholding Tax Return and the Process of Filing Withholding Tax Return

  The summary declaration is the written notification, that is, declaration, of the tax amounts of workers' withholding rate information, rent withholding information and self-employment withholding information to the relevant tax office.

According to Article 84 of the Income Tax Law, "The withholding tax return is reserved for the collective reporting of taxes withheld by employers or other persons performing withholding tax, together with their tax bases, to the tax office." In other words, employers, not employees, are held responsible for the withholding tax return . Employers are also held responsible for the amount of tax due.

Monthly withholding tax returns must be filed by the 26th of each month. Quarterly returns must be filed by the 26th of the last month of each quarter . If your tax payments are prompt, you may also be eligible for deductions. For more information about withholding tax returns, please see our article, "What is a Withholding Tax Return?"

 

 

Value Added Tax, VAT Declaration Process

Value Added Tax (VAT), a common tax return, is a type of tax for which every business is responsible. Both sole proprietorships and capital companies are responsible for filing VAT returns regularly every month. A VAT return is a statement prepared by calculating a business's purchases and sales, i.e., its income and expenses, during the month. A VAT payment may result from the calculation of purchases and sales; if not, it is carried forward to the following month. The VAT return is due on the 26th of the following month.

 

Provisional Tax Return and Provisional Tax Return Process

Provisional tax returns are filed quarterly. They are a type of tax return in which businesses report their profits and losses in writing on a quarterly basis. Instead of calculating a business's income all at once, these tax returns are calculated and declared on a quarterly basis . Provisional tax returns are issued three times a year: the first, second, and third periods. Tax rates may vary depending on the business's activity.

Annual Income Tax in Simple Method

The simplified annual income tax is a tax type that calculates a business's annual profits and losses only once a year. Only taxpayers subject to the simplified annual method are liable for this tax type. Payments are made based on the annual profit percentage. Businesses subject to the simplified annual method must file their annual income tax return by the last day of February of the following year.

 

Annual Income Tax Return

Only sole proprietorships are held liable for annual income tax. Sole proprietorships are liable for tax on the previous year's income on March 31st . Each year, they report their income and losses from the previous year through their annual income tax return.

Declaring and paying taxes on time is crucial. Late tax payments may result in penalties. If you're interested in establishing a company, please contact us for all your enquiries.