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Declaration of real property income (rental Declaration of other earnings and incomes
income)

Pertaining to the Article 21 of Income Tax Law, for 2017 TL Incomes within the context of other earning and incomes
3.900 portion of the proceeds obtained through residential are classified under two groups as “earnings from increase
leasing within a calendar year are exempted from income in value” and “incidental earnings”. Revenues taxed as
tax. In case the rental income amount exceeds the exemption “earnings from increase in value” are obtained through the
amount for the concerning year, that should be declared with sale of goods and rights indicated in the Article 80 of Income
the annual income tax return. Tax Law. Revenues to be taxed as “incidental income” are the
ones acquired through non-continuous activities indicated in
On the other side, if the real properties are rented to the the Article 82 of Income Tax Law.
people and companies on workplace purposes that are liable
for applying withholding, a 20 % income tax deduction is Fully liable real persons should declare their other income
applied over the rental payments. Taxes deducted by those and revenues exceeding the exemption limit through an
people and companies from workplace rental payments annual income tax return. The aforementioned exemption
made to the real persons can be withheld from the income limit is set as TL 11.000 for “earnings from increase in
tax calculated on the tax return in the circumstance that the value” derived in 2017 while TL 24.000 for “incidental
real persons declare that income. Pursuant to the Article earnings”.
86 of Income Tax Law, provided that they were subject to
withholding in Turkey, if the immovable and movable capital Declaration and payment of income tax
revenues subject to declaration remain below TL 30.000 for
2017, those incomes will not be declared. Accordingly, if the The basic rule for income tax is that the tax return should
gross amount of rental income derived from real properties be submitted to the tax office of the place in which the real
rented with workplace purposes in 2017 and subject to person acquiring that income is resident. Besides that, it is
deduction exceed TL 30.000, that income should completely possible to submit the tax returns electronically through the
be declared through the annual income tax return. declaration system of internet tax office.

On the other side, the aforementioned declaration limit Regarding the Income Tax Law, the principle of adding
is applied as TL 1.600 for the rental income that are not up and declaration of the whole income items is adopted
subject to any tax deduction and exemption implementation. and the taxpayers should declare the income and revenue
derived from those items within 2017 calendar year through
Declaration of the income from securities annual income tax return between 1-25 March 2018.

A portion of the income from securities derived by the fully The first instalment of income tax calculated over the tax
liable real persons in 2017 would not be declared by annual return should be paid until the end of March and the second
income tax return regardless of the amount since they are instalment should be paid until the end of July.
subject to withholding during the year while some part of it
will not be declared as well since the derived income does
not exceed a certain amount. Is it possible to issue the

Pursuant to the Article 86 of Income Tax Law, income invoice that should be drawn
derived through private pension system and individual up as an e-invoice in a
insurance that are subject to withholding would not be
declared by annual income tax return regardless of the printed form?
amount. Also, as per the temporary Article 67 of the
aforementioned Law, for the income derived through The Ministry of Finance introduced the implementation of
depository interest, repurchase, private financing institutions e-invoice as of 5 March 2010, through the Tax Procedures
subject to taxation through withholding by banks or Law (TPL) General Communique series no.397. In this
brokerage houses as of 01.01.2006, submitting an annual article, we tried to indicate the possible negative outcomes
income tax return is not required.
of issuing printed hard copy invoices despite being within the
Also, as per the Article 94 of Income Tax Law, income scope of e-invoice, concerning the taxpayers.
derived from securities subject to withholding and did not
exceed the declaration limit of TL 30.000 for 2017 should The e-invoice which is not a new sort of document and shares
not be declared. Securities income subject to withholding the same legal qualifications with the printed invoice became
exceeding that limit should be declared and taxes withheld a mandatory requirement for the real persons and legal
within the year would be deducted from the income tax entities through the TPL General Communiques no.397,
calculated on the tax return. 416, 421 and 454.

Pertaining to the Article 86 of Income Tax Law, submission Pursuant to the repeating Article 242 of TPL, for the parties
of an annual income tax return is not required for the income there is an obligation of issuing and receiving e-invoice
derived from securities and real property obtained within a that is in the nature of an electronic document; while the
single calendar year and not exceeding TL 1.600 for 2017 terms regarding invoices within TPL and other tax laws are
totally, that are not subject to withholding and exemption applicable for the e-invoice as well.
implementation.
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