Page 14 - VGMart_2018

Vergide Gündem
English Translation

Adding up income items and declaration of

them through annual tax return

The people domiciled or deemed to be domiciled in Turkey are accepted as “fully
liable” pursuant to the Income Tax Law. They are taxed for the whole earnings and
revenues derived in Turkey and abroad.

The following requirements should be met to be considered as domiciled in Turkey:

• Holding a certificate of residence in Turkey,
• Residing in Turkey continuously more than six months in the course of one
calendar year (Provisional absence shall not interrupt the continuity of residing in
Turkey).
Pertaining to the Income Tax Law, people non-resident in Turkey are seen as
“limited taxpayers”. These people are only taxed for the earnings and revenues
derived in Turkey.

As per the Income Tax Law no.193, income of real persons is subject to income
tax. Income items subject to income tax consist of commercial income, agricultural
income, wages, self-employment income, real property income, revenues from
securities and other incomes and revenues. (ITL art.2)

The principle of adding the aforementioned income items and declaring them
through the annual income tax return is adopted within the Income Tax Law. (ITL
art. 85) The taxable amount (tax base subject to taxation) is detected by totalling
the income items following the required deductions based on the declared incomes.

Declaration of commercial income and self-employment income

Article 37 of the Income Tax Law provides context on the activities considered as
commercial income. Article 65 of the Income Tax Law contains the definition of self-
employment income while the way how the income should be detected is indicated
within Article 67. Pursuant to the Article 85 of the Income Tax Law; commercial
income taxed under simple entry and commercial, agricultural and self-employment
incomes taxed under real taxation system should be declared through annual
income tax return regardless of the amount (even there is an incurred loss).

Declaration of wage income

Pertaining to the Article 86 of Income Tax Law, an annual income tax return would
not be submitted for the wage income received from a single employer and taxed
by withholding regardless of the amount. However, in the circumstance that wage
income is derived from more than one employer, if the total of the income derived
from the employer following the first one exceeds the amount indicated in the
second bracket of income tax tariff (TL 30.000 for 2017) the whole wage income
including the amount derived from the first employer should be declared.

14 Mart 2018