193 - Income Tax Law


Article: 1 - Scope

The income tax is levied on the income of individuals (real person).

Income is the gross profit/earnings of an individual (real person) within a calendar year.


Article: 2 - Income elements

Revenue and earnings regarded as income are;


  1. Commercial earnings,
  2. Agricultural earnings,
  3. Wages,
  4. Self-employment (Professional Services) earnings,
  5. Real-estate capital revenue,
  6. Returns on stocks and bonds,
  7. Other revenue and earnings.


Unless otherwise stated within this law, real and gross amounts are used to determine the income related with above listed elements.


Article: 3 - Tax Payer

Individuals (real persons) are taxable for their revenues and earnings within and outside Turkey who are;


  1. Residing in Turkey,
  2. Turkish citizens employed by Governmental authority and incorporated businesses  or  Turkey-centered organizations and enterprises who are residing at foreign countries due to mentioned Governmental authority and incorporated businesses  or  Turkey-centered organizations and enterprises works/businesses.

(Such individuals (real persons) are not taxable for their income provided that their income at the realized country already taxed -income tax or like-)



Article: 4 - Settlement at Turkey

Individuals (real persons) listed hereunder are regarded as settled down in Turkey;


  1. with legal domicile at Turkey (Domicile is the place of residence written at the 19th and following articles of Turkish Civil Law)
  2. who stays at Turkey for more than 6 months continuously within one calendar year.

(temporary leaves does not break duration of stay at Turkey)


Article: 5 - Occasions regarded as “Unsettled“

Foreigners listed hereunder are regarded as unsettled at Turkey even if they do stay at Turkey for more than six months;


  1. Businessman, scientists and artists, specialists, officers, press and broadcasting reporters coming to Turkey for a specific and temporary task or work, and others with identical situations coming for education,health treatment,rest and travel purposes
  2. Detained or left at Turkey due to conviction,imprisonment or disease reasons beyond one’s control.


Article: 6 - Tax Payers and Subject

Individuals (real persons) with “non-resident“ status at Turkey are subject to taxation for their revenues and earnings only from Turkey.


Article: 7 - Acquisition of earning and revenue from Turkey

Anybody deemed as “limited liability“ tax payers; it is regarded as earnings and revenues are acquired at Turkey with conditions written hereunder,


  1. At commercial earnings and revenues; having a business office at Turkey or to have a present permenant representative as income earner and earning revenue through that business office’s or representatives.

(It is not regarded as “Revenue is earned from Turkey“ provided that, those who manufactured or purchased goods at Turkey for exportation aim and then after send all commodities to ferign countries without selling at Turkey and those who does not have business office at Turkey even though they fulfill above article conditions)


  1. Agricultural revenues: executing agricultural activities at Turkey,
  2. At wages:
    1. Rendering a service or being already rendered at Turkey or  benefited at Turkey;
    2. Assessment of Turkey resident enterprise’s administrative councils president and member’s, auditor’s,liquidator’s attendance fee, remuneration,bonus and kind at Turkey
  3. Self-employment (professional service)revenues: Execution or benefiting of /from professional services at Turkey.
  4. Real-estate capital revenue: Having real-estate at Turkey and using or benefiting from assets and rights with same nature.
  5. Returns on stocks and bonds: capital stock should be invested/deposited at Turkey.
  6. For other revenues and earnings:

Proceedings or works that borne this sort revenue or earning should be carried out or benefited at Turkey.


Above used “Benefiting“ term at the 3rd, 4th, 5th and 7th subclauses of this article intent to mean payments that took place at Turkey or if payment done at a foreign country, transferring to the accounts or allocation from the profit of the payer at Turkey or on behalf and account of the receiver.
















Article: 8 - Business Office and Permenant Representative

Business Office written at the 7th Article’s 1st subclause is constituted by the decree of Tax Procedural Law.


Permenant Representative written under the same Article is, dependent to the Represented via a service contract or attorneyship, works at a definite or indefinite term on behalf and account of represented or authorized to process several commercial transactions.


Anybody listed hereunder are regarded as permenant representative without requesting further conditions.


  1. Commercial agent, trader attorneys and officers together with the one’s with business agent status as per Commercial Code.
  2. Except advertisement expenses of represented, one’s reimbursed continuously either partly or completely by the represented.
  3. One’s storing goods for sale at their depots or stores for the account of  represented by consignation.


One’s multiple representation of several bodies at the same time does not change “permenant representative“ his/her status.


Article: 18 - At Self-Employment (Professional Services) Earnings

Revenue earned by author,translator,sculptor, calligrapher,painter,composer,computer programmer and inventors and their legal successor’s poem, novel,article, scientific research and analysis, computer software, interview,caricature,photograph,movie,video,radio and television script and play like work’s and their broadcast via newspaper,magazine,computer and internet medium,radio,television and video or sales of book, CD, floppy, picture/photo, statue, musical note and sale of their invention patent or handing over and transferral or rental of rights are exempted from Income Tax.


Fees and wages collected by the appraisal of art works via publication, presentation, performance and exhibition are also subject to exemption.


Nonessential(occasional) earning of forementioned revenue does not creat an obstacle to implement exemption award.



Article: 19 - Investment allowance exemption on commercial and agricultural earnings

1.Full-liability-tax-payers (ordinary partnership, unlimited liability company and limited company with corporate tax payers) and limited-liability-tax-payers whose commercial and agricultural earnings are calculated as per balance sheet basis can subject their earnings to discount as investment allowance exemption at the determination of tax basis for 40% of the cost price of goods which are purchased or manufactured for their business activities that are subject to depreciation.


Expenses incurred and capitalized for drilling and research activites as per Petroleum and Mine Law could benefit from Investment allowance exemption application.


2. Investment allowance exemption enforcement will start at the year when expenses occured for the goods subject to expemtion and continue until reaching the amount of deduction.


At the determination of tax base related with the year when investment expenses occured, disregarded exemption amount due to insufficient revenue, at the following periods, regarded as per the raise applied with respect to wholesale price index announced by state institute of statistics at that periods.


3. At inflation adjustment applied periods, corrected value at the end of the fiscal term at when asset recording took place for an economic good that is subject depreciation is taken into consideration for calculating investment allowance exemption value.


However, expenses occured at the earlier fiscal periods then the period at which asset-recording took place considered with the adjusted/corrected occured-period-end values.


For the following periods, investment allowance exception is not applicable for the differences resulted from inflation adjustments.


4. It is not possible to calculate Investment allowance exemption for below mentioned economical goods


- Economical goods with a value lower than 5 billion TL. (With cabinet decree numbered 2004/8295, determined value is 10.000 New Turkish Liras. Validity; 01.01.2005. Effective date; 29.12.2004)

(economical goods presenting a unity from technical and economical respects are regarded as “integrated whole“ at the determination of having an exorbitance or not)


-Economical goods which are used before within Turkey or abroad. (except floating docks and boats under the age of 12 years)


-Immaterial rights and special cost prices with an economic life value lower than 5 years

(except computer softwares necessary to operate Investment allowance exemption applied economical goods)


-Appliance,tool,furniture, and office fixed assets which are not directly related with goods and services production.


-economical goods acquired free of cost


-buildings acquired by purchase or buildings under construction (except the one’s constructed for goods and services production)


-lands or plots


-Passenger car and identical land vehicles, yacht,cruiser,boat and so forth motor-sea-vehicles, plane and helicopter like aviation vehicles. (except the one’s related with the principal business activity)


- Economical goods purchased to be used at the abroad investments


5. Tax payers who sold off  economical goods subject to investment allowance exemption beginning from the date of asset-recording within two years, lost their right for the application of investment allowance exemption about those economical goods.


In such case, there will be no proceeding for an earlier investment allowance exemption applied/benefited.


6. Tax payers keep their registry/records trackable by the means of year wise calculated and benefited investment allowance exemption values.


7. Ministry of Finance is authorized to determine the procedures and principals for the enforcement of this article.



Article: 20 - Earnings exemption at education and teaching business

Earnings from the management of private schools giving preschool,primary school,special education and private secondary school education are exempted from income tax for 5 taxing periods under the procedures and principals determined by the Ministry of Finance by means of getting concerned ministries opinion.


Exemption starts at the period of taxation when the schools go into operation.


Article: 21 - Real-estates and Property Rights

(Clause changed by the 27th article of law numbered 4369. Validity; 01.01.1998. Effective date; 29.07.1998) 1.500.000.000 (Setted as legal limit by the 16th article of law numbered 4842. Validity; 24.04.2003. Effective date; 01.01.2003)Turkish Lira of the revenue earned from renting buildings for private residence usage within one calendar year is exempted from Income Tax. (2.600 TL is determined for the year 2010 as legal limit settled by the Income Tax General Communique with serial no 273)


It is not possible to benefit from this exemption if revenue earned above legal limit is not declared or incomplete decleration took place.


One’s with an obligation of declaring their commercial,agricultural or professional earnings by yearly declaration forms and one’s whose earnings will be declared by these can not benefit from this exemption.


Article: 23 - Wages

Wages listed below are exempted from Income Tax.


  1. Wages of employees working at firms producing rug and solely hand woven carpet at villages or locations with a population lower than 5.000 as per the latest population census within municipal border.
  2. Wafes of workers working with farmers who are not taxed by actual earning basis or with one’s exempted from Income Tax.
  3. Wages corresponding to the sole working times of workers at mines in the form of underground business enterprise for jewel production or like
  4. (Clause removed by the 82/3-b article of law numbered 4369. Effective date; 29.07.1998)
  5. Wages of guardsman protecting farmer goods and wages of village headmen and villages clerk,ranger,prayer leader,guardsman and like workers paid from village budget.




  1. Servant wages (Servents are the ones employed by individuals to commence works at homes,gardens,apartments and non-commercial places such as doorkeeper, gardener, nursemaid,nurse mother,housemaid)
  2. Wages paid to sentenced and detainee and given  at art schools and like institutes, prisons and houses of correction, workshop of  poorhouses students.
  3. Benefits furnished by employer to employees by providing meal. (It is a necessary condition for employes to transfer meal payments directly to the meal service providers and not to exceed 800 000 Turkish Lira (10,00 TL is determined for the year 2010 as legal limit settled by the Income Tax General Communique with serial no 273) for daily allowance under the conditions of not giving meal within business place or outbuildings.If the amount exceeds the limit, excess portion of the payment and cash payments towards employee as meal allowance and benefits under same aim will be taxable as wage.
  4. Benefits provided by allocating houses and providing illumination,heating and water to those houses for workers employed in a general mining venture or factory and civil servants required to be hosted as per private laws and benefits provided by allocation of private housing for employees owned by employer with a gross living space limited to 100 sqrM (In case of exceeding 100 sqrM, this exception is not applied on the excess portion of forementioned benefit)


  1. Transportation expenses incurred by the employer for joint transportation of employees from and to the business place


  1. Wages of widowed and orphan,disabled,retired paid by the funds specified by the temporary 20th article of Social Securtiy Law (Nr. 506) and pension fund established by Law. ( If the total amount of wages paid by the funds described at the Social Securty Law’s (Nr.506) temporary article Nr. 20 is more than the highest payment amount to the highest level of government officer, the difference wage will be subject to tax) (Including wages paid from general,additional,private budgets)


  1. Wages of apprentices who are subject to Apprentice and Professional Education Law (Nr.3308) that are not exceeding minimum allowed wage.


  1. Wages of widowed and orphan,disabled,retired paid by abroad social security institutions.


  1. Foreign currency wages paid to employees over the revenue earned outside Turkey by the limited-liability-tax-payer employer without a legal business office at Turkey ,paid to employees working for limited liability employer without a legal business office at Turkey.


  1. One at the business places with an employee number less or equal to 100, two at the  business places with more than 100 employee, wages of amateur sportsman with a proof of national competition participation which required to be documented by employer.


(With a condition of not exceeding double of minimum wage allowed)





Article: 32 - Minimum Living Allowance

(Clause changed by the 2nd article of law numbered 5615 Effective date; 04.04.2007 to be applied on the earnings from 01.01.2008)

Minimum living allowance exemption is applied on the taxation of wages with actual earning basis.


Minimum living allowance exemption; 50% for the taxpayer; for the yearly gross amount of minimum allowed wage applied to workers older than 16 years of age working at the industry segment and valid at the start of the calendar year when the wage is earned, 10% for the wife who is not working and without an income, for the childeren individually; 7,5% for the first two child, 5% for others.


If the income belongs to the partial period, month fractions will be counted as full months and deduction amounts will be in charge corresponding only to that period.


Minimum living allowance is applied by deducting the result of amount determined with this clause multiplied by the rate applied for the 1st segment of the income tax tariff expressed at the 103rd article from the calculated tax amount.


There will be no refund at the cases where the deduction amount is excess.


“Childeren“ expression at the allowance application means, those who did not completed 25 years of age while being educated or those who did not completed 18 years of age staying with tax payer or looked after by the tax payer. (including alimony receivers,adoptive sons, and grand childs lost their mother and father living with tax payer)


Tax payers marital and family status will be considered for the period of income generated at allowance amount determination.


Deduction will be applied; only to either wife or husband for children, each one of family members receiving wage income provided not to exceed the amounts calculated as per the above rates.


For divorced,  the number of childeren granted an alimony is taken into consideration when calculating allowence.


(Clause changed by the 2nd article of law numbered 5904. Effective date; 01.01.2009)At taxation of wages, if present,  incentive aimed other deductions and exceptions will be taken into consideration after applying living allowance.


Council of Ministers is authorized to increase the rates of minimum living allowance explained at the second subclause or decrease it to the legal rate provided that the allowance amount is not exceeding minimum allowed wages yearly gross total.


Procedures for minimum living allowances application periods, deduction methods, and other matters will be setted by Ministry of Finance.






Article: 36 - Wages Not Subject To Living Allowance Deduction


Deductions explained at the 31st Article is applied to the tax of highest wage for the professional service provider (self employed) who is receiving several wage payments from various places.


If the self employed has a tax card, the deduction is applied only to the wage received from the employer keeping that tax card.


Deduction is applied to the wage received from the employer who keeps the family status certificate for those (self employed) who are exempted to have tax card as per tax Procedural Law.


Deductions written at the 31st Article does not include limited liability tax payers.


Article: 37 - Definition of Commercial Earning (Business Income)


All kind of income generated from commercial or industrial activity is commercial earning.


Below mentioned earnings are regarded as business income at the application of this law


  1. from management of mining,stone and lime industry, sand and gravel production places, brick and tile harvests
  2. from share/stock brokerage
  3. from management of private schools and hospitals and kind
  4. from the continuous business of real estate sale,buying and building
  5. from stock trading of one’s done for own account
  6. earnings derived from land sale divided into parcels and sold or acquired via swaping  fully or partially within 5 years counted from the date of acqusition or at following years.
  7. earnings derived from Dental Prosthesis


Shares received from partnerships profits is regarded as personal commercial earning for Partner’s at general partnerships and for  acting partner’s at limited or shared liability partnerships.


Commercial Earning is determined either by Tax Procedural Law awards and by actual (balance sheet or operating account method)  or simple method written at this law.


Self-employed professional service providers can import his/her professional service earnings to the management account of private schools and hospitals and kind.


Article: 38 - Determination of Commercial Income by Balance Sheet Basis



Article: 39 - Determination of Commercial Income by Operating Account Basis




Article: 40 - Deductible Expenses


It is allowed to deduct below listed expenses in order to determine net income:


1. General expenses for realization and continuation of commercial income; (In addition to the costs explained at this clause, tax payers dealing with export,construction,repair,erection and transportation works at abroad are also allowed to deduct expenses calculated as lump sum corresponding to the costs for performing mentioned works provided not to exceed 0,5% of income as foreign currency.

2. Food and accommodation expenses, treatment and medicine expenses, social security premium and retirement pay (those premiums and retirement payments must be paid without having recovery status and to insurance companies resident at Turkey or to pension funds having legal person status), clothing expenses - as discussed at article 27 - of attendant and employees at business place or premises.

3. Provided to be related with business, costs, losses, indemnities paid as per contract or court decision or legal order.

4. Travel and accommodation fees proportional to the work importance and volume related with the business. (Provided to be limited with the travel objective’s lenght)

5. Costs of vehicles rented or included at the enterprise and used at work.

6. Provided to be related with enterprise, building, land, expenditure, consumption, stamp, municipal taxes, compulsory levy and registration fee like tax in kind, duties and levies.

7. Depreciation reserved as per Tax Procedure Law awards.

8. Trade union subscription fees paid by employers as per Trade Union Law awards. (subscription fee’s 1 month value can not exceed total of daily base wage paid at business place to employees )

9. Contribution fees paid on behalf of employees for private pension system by employers. (Contribution fees used at the determination of tax base paid either by employers and employees to private retirement system can not exceed amounts stated at the 3rd sub clause, first clause and 63rd Article of this Law)

10. Cost of clothing, fuel for heating, cleaning and food donated to the associations and foundations as per the decrees - procedures announced by Ministry of Finance aimed to help poor.


Article: 41 - Non-Deductible Expenses


Below listed payments are not allowed to be deducted as expense.

1. Cash or kind values withdrawn from enterprise by the owner, owner’s wife and children.(Values taken as it is will be valuated by the cost of similar item and added on to the enterprise owner’s withdrawal.)

2. Indemnities, commissions, bonuses, wages, salaries paid from the enterprise to the owner, owner’s wife and children.

3. Interests to be executed for the capital injected by the enterprise owner


4. Interests to be executed over the current accounts or other type of receivables for enterprise owner, owner’s wife and children at the enterprise.

5. Differences against the enterprise borne due to improper and unmatching real market value and value used at the sale or purchase of goods violating value of equal principle for the transaction with related parties by the enterprise owner are regarded as withdrawn from the enterprise excluding operations listed between 1st and 4th clauses.

Enterprise owner’s wife, ancestors, descendants, 3rd level in laws, directly or indirectly related firms, partner’s of those firms, other firms under the management, supervision and control by the means if capital are regarded as affiliated.

At the application of this clause, production and construction, renting or leasing, barrowing and lending money, transactions require salary,bonus and kind payments are regarded as purchase or sale of good and services in any case.

Affiliated parties taxation operation will be corrected if the differences regarded as withdrawn from the enterprise are calculated at the declared tax base for income or corporate tax by the affiliated party.Matters not present at this article related with the affiliated parties and transactions done by those parties are governed by 5520 numbered Corporate Tax Law’s 13th Article.

6. Indemnities borne by the guilt of enterprise owner and all kinds of monetary fines and tax penalties. (Indemnities deemed for penal obligation at the subsidiaries are not regarded as penal indemnity)

7. 50% of all advertisement expenses related with the alcohol and alcoholic beverages in addition to tobacco and tobacco products. (Cabinet is authorized to increase this rate upto 100% and decrease it to 0%)

8. Expenses and depreciation allowances set a side for motorized sea vehicles such as yachts,cutters,boats,speed boats and aircraft such as planes and helicopters which are acquired through leasing or which are capitalized by the enterprise but that are not relevant to the main field of activity of the enterprise.

9. Indemnity expenses arising from the tangible and intangible damages that have incurred due to illegitimate actions committed via press or radio and TV broadcast.

At the application of this article, acting partner of unlimited liability company and ordinary and shared limilted liability company is regarded as owner.

Article: 42 - Construction and Repair works extended to calendar years


For construction (including stripping of soil) and repair works extended to calendar years, profit and loss is determined as definite and regarded as that years profit and shown on the same years declaration.


 Tax payers for cases related with this article must show each construction and repair works revenue and expenses at different books or different pages of the same book and submit their declarations at 25th of March at  the following year of work completion.


Article: 44 - Completion at Construction and Repair Works

At Construction and repair works, work is regarded as completed on the approval date of temporary acceptance document by Owner (Directorate) for cases which temporary and final acceptance applies;  actual dismissal or completion date of works at other cases.

All revenues regardless of name and expenses incurred related with those works after the completion date are considered at the calculation of profit and loss of the year which expense and revenue is realized.


Article: 61 - Description of Wage


Wage is a benefit provided by cash in kind and cash, represented by cash, in return of services performed by employees registered and subject to an employer.


It does not change the true nature of wage by paying it under the names of indemnity,allowance, cash compensation (Financial Liability Indemnity), allocation, increment, advance, remuneration, attendance fee, premium, bonus, in return of an expense or determined by a particular percent of revenue provided not to have the attribute of a partnership.

At the application of this law, below mentioned payments are regarded as wage:

1. Monthly payments to widowed, orphan, disabled, retirement which are left outside the exception discussed at the 11th clause of article 23.

2. Other benefits provided by cash or kind in return of services performed or will be performed in the future.

3.Benefits, cash or kind payments to Turkish Grand National Assembly,  provincial and municipal council members as well as members of permenant and temporary council’s established by private laws or administrative decisions, due to those members capacities.

4. Benefits, cash or kind payments to chariman, head of executive board and members as well as liquidators due to their capacities

5. Benefits, cash or kind payments to competition jury members, sport refrees, experts, official arbiters and court experts

6. Benefits provided and payments done as transfer fee or other kind to athletes.

Article: 62 - Definition of Employer

Employers are real or legal persons who recruit profession experts and employ them for service with order and instruction.

 Those who are obliged to fulfill requirements and process payments listed between 1st and 6th clauses of Article 61 of Income Tax Law are regarded as employer.

Article: 63 - Real Wages

Real net amount of wage is the sum left after deducting below mentioned deductions from payments done in cash or kind of benefits provided by employer.

1. Legal cuts for 657 numbered Government Officer Law’s 190th Article, Army Mutual Aid Association and kind public body;

2. Remuneration and premiums paid to the funds described at the 20th temporary article of Social Security Law Nr. 506 as well as retirement funds established by Law

3. Provided that the insurance and retirement agreement must be composed by a insurance or retirement firm resident at Turkey and business center present at Turkey;premiums and contirbution fees paid to the individual retirement system by the employees for the paid one’s him/her self, wife for life,death,accident,disease,disability,unemployment, being monther,birth and education like personal insurance policies.

Premium,subscription fee or contribution payments total shall not exceed the 10% of the wage earned at the payment month (5% for payments done to personal insurance policies other than individual retirement system) and yearly speaking, minimum allowed wages yearly total.

Cabinet is authorized to increase this rate upto 20% (10% for personal insurances other than individual retirement system) and revise the limit provided not to exceed the twice of minimum allowed wages yearly total.

4. Subscription fees paid to unions by the employer as per the related laws. (Payment must be certified)

5. At the determination of wages real value, personal taxes like Income Tax shall not be deducted from the wage.

Wages paid in foreign currency is converted to Turkish Lira with stock exchange price of the date.

Cash kind aid given to the employee valuated as per the avrg. retail price at the delivery date and place; benefits generated by housing and other types as per the market value rent fee or market value of other benefit.

Article: 64 - Other Wages

The net wages of below listed employee is 25% of the minimum allowed wages yearly gross total which is applied for workers older than 16 years working at industrial sector, valid from the start of the calendar year.

1. Employees working with tradesman subject to simple method at income determination;

2. Drivers at special services;

3. Construction workers paid and employed by private construction owners;

4. Those working with the one’s having income from real estate

5. Those presented in this scope by Ministry of Finance  via state council opinion due to not having the chance of determining real wages.

6. No annual return is necessary for other wages, if a return is submitted due to other income, those shall not be imported to the return.

Article: 65 - Definition of Professional Service Income

All earnings derived from professional employment activites are professional service income.

Professional service is performing works for own name and account based on personal work, occupational or technical knowledge instead of capital.

Due to arbitration works, wages paid to refrees and  income borne by professional services performed by unlimited liability companies, limited partnerships, ordinary partnerships are all regarded as professional service income.

Article: 66 - Self-Employed (Professional Service Provider)

Those performing professional service as routine are regarded as self-employed.

Dealing with other works or duties in addition to professional service activity does not change this status.

At the application of this article:

1. Custom brokers, stock brokerage or agency, notaries, those liable to perform notary duties;

2. Those does not fitting self-employed description but having shares from professional service income by gathering self-employed together and establishing an organization or supply capital to those or with other conditions.

3. Partners at unlimited liability and ordinary companies, acting partners at limited partnerships having professional service activity.

4. Lawsuit agents, consultants, those following the commercial and occupational works of self-employeds via dealers and establishments and music artists,

5. Those having occupational activity like guide,petition writer, health officer, pretomist,midwife with at least satisfying two of the conditions listed at the tax Procedure Law’s 155th Article.

Are regarded as self-employed due to those activites.