Tax minimization in Turkey is a legal way to control and reduce the amount of taxes that a company needs to pay. The procedure is complex and it involves a generally good financial discipline. Tax minimization is much more than just avoiding to pay more taxes.
Tax minimization strategies in Turkey
One way to minimize taxes is to make certain donations. Just like well planned investments, donations can be made in order to help a company reduce the amount of due taxes. The donations can be made as a percentage of the adjusted gross income of the company or by giving away assets. The most common type of donation is the cash donation.
Bringing forward the tax deductions and paying the interest in advance for investment loans are also options to reduce taxes. Also, business owners in Turkey can maximize their contributions to any existing retirement plans.
If you want to invest in Turkey
, our company incorporation agents
can help you with detailed information about incentives for special types of activities in Turkey.
Taxes in Turkey
The standard corporate tax rate in Turkey is 20%, however, reduced rates apply to earning derived from investments in specific sectors, for example research and development activities. A withholding tax applies to dividends, interest and royalties. Turkey has signed approximately 77 tax treaties with other countries, thus, companies may benefit from tax exemptions under certain conditions.
In Turkey, the standard VAT rate is 18%, with reduced rates for basic food products, pharmaceutical products and other items. The tax year is the same as the calendar year. The annual income tax return in Turkey must be submitted between March 1st and March 25 the following year. Penalties apply for tax avoidance or tax evasion. Our company formation specialists can give you more information about direct taxes
and indirect taxes in Turkey