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Turkey: Worked Example of Tax on Rent

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Last Updated: Oct 02, 2006

Tax Example: Rent

Non-resident couple's joint monthly rental income1 €1,500 €6,000 €12,000
Annual Rental Income 18,000 72,000 144,000
Less Exemption Amount3 (2,094) (2,094) (2,094)
Less Standard Costs (25%)2 (3,976.50) (17,476.50) (35,476.50)
= Taxable Income 11,929.50 52,429.50 106,429.50
Income Tax Rates4
YTL6,600 – YTL15,000 20% 691 691 691
YTL15,000 - YTL30,000 25% 627 1,099 1,099
YTL30,000 – YTL78,000 30% 2,356 2,356
YTL30,000 – YTL78,000 35% 3,678 8,796
Over YTL78,000 40% 4,951
Annual Income Tax Due €2,636 €15,648 €35,786
Tax Due as % of Gross Income 14.6% 21.7% 24.8%
Thanks to:

DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on October 2, 2007.

Notes


1 The residential property is jointly owned by husband and wife, but taxed separately. The Turkish tax system is based on individuals, therefore, 50% upon each partner.

2 Under the Turkish Income Tax Law, expense deductions can be made by choosing either the “no questions asked” option by stating a 25% expense against rental income after exemption, or the “actually incurred expenses” option, by stating the documented and legitimate expenses incurred.

3 The Turkish Law exempts YTL2,000 of housing rental income from taxes. Exchange rate as of 02 October 2006 is: €1=YTL1.91.

4 Applicable marginal tax rates for year 2005.

Your Comments

posted by patrick hartnett | 2008-02-18

HiIf you become a Turkish resident (i.e. live there for more than 6 months of the year) does the YTL2,000 exemption for rental income tax still apply - or is it just for non-residents? And what about the 25% deduction - does that apply to residents and non-residents alike?Thanks.

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