DECLARATION OF RENTAL INCOME IN TÜRKİYE

Non-resident taxpayers do not submit annual returns for their incomes from immovable property which are taxed wholly by the withholding in Türkiye. Also, in case they submit the annual return for other incomes, they do not include their incomes which are subject to the withholding in their returns.

Taxpayers whose income subject to declaration consists only of the rental income will submit the annual tax return, if;

• Those whose housing rental income obtained in a calendar year exceeds the exemption amount of 9,500 TL for 2022 (21,000 TL for 2023),
• Those who obtain rental income not taxed by withholding tax as a result of renting goods and rights within a calendar year. On other saying, rental incomes that are not subject to the withholding and the exception must be declared the annual tax return regardless of the amount.

Every member of a family has to submit a return on their own behalf for the rental income they obtained from the property and rights belonging to them.

On the occasion that minor and restricted persons are taxpayers; the annual return to be submitted on behalf of them is signed by their parents, guardians or curators. In case of having property and rights with shares, every partner need to declare the rental income corresponding to his/her own shares.

DEDUCTIONS TO BE MADE FROM INCOME INCLUDED IN ANNUAL TAX DECLARATION

Deductions with respect to income to be declared by an annual tax return are specified in Income Tax Law and in other relevant laws. In order to make the following deductions from the income to be declared in income tax return while income tax base is being determined, there must be an income to be declared in an annual tax return and deductions to be made should satisfy the requirements specified in the relevant legislation.

The revenue that is declared at the annual tax return before the other deductions and the revenue loss of former years are deducted would be taken as the base revenue to calculate the amount that would be deducted.

Accordingly, here are some of the matter that may be made subject to the discount:

10.1. Life / Individual Insurance Premiums

The 15% of life / individual insurance premiums paid, can be deducted for determining the tax base in the annual tax returns.
The premiums that should be taken into account for determining the tax base are as follows:

• 50% of life insurance payments of the taxpayers’, their spouses and children,
• 100% of death, accident, health, disability, maternity, child birth and education individual insurance premiums.

The total amount that would be deducted cannot exceed the 15% of total revenue and annual amount of minimum wage. (The gross annual minimum wage for 2022 is 68.850,00 TL.)*

The premiums paid to the individual retirement insurance cannot be deducted.

*The gross minimum wage amount for 2022 was calculated in line with the Minimum Wage Determination Commission Decisions, which were determined as: 166.80 TL per day between 1/1/2022-30/6/2022 and TL 215.70 TL per day between 1/7/2022-31/12/2022.

10.2. Education and Health Care Expenses

The education and health care expenses done as stated below would be deducted from the annual revenue declared in tax return in condition not to exceed the 10% of total revenue:
• The education and health care expenses should be performed in Türkiye.
• The expenses should be verified by the documents received from the individual or legal personalities who are personal or corporate income taxpayers.
• The expenses should be regarding the taxpayers’ oneself or their spouse and small children.

The term” small child” refers to children under the age of 18 or under the age of 25 in the education who live with a taxpayer or who are cared for by a taxpayer (including those who are given alimony, those who have been adopted and those who live with a taxpayer from grandchildren who have lost their parents).

10.3. Donations and Aids
10.3.1. Donations and Aids Which Can Be Deducted As Limited to 5% of Income to be Declared

Personal income taxpayers, general and private budgeted public administrations, provincial administrations, municipalities, villages and non-profit associations and the foundations that are exempted from tax by President of the Republic, can deduct the donations and aids against receipt from their annual income in condition that it would not exceed the 5% of total income. (It would not exceed 10% of total income if donations are made to the stated organizations, associations and foundations in the development priority zone.)

10.3.2. Donations and Aids Which Are Completely Deductible

a) The donated schools, health institutions, the student dormitories and day care centers which have bed capacity not less than 100 (in development priority zones not less than 50), orphanages, rest houses, care and rehabilitation centers to the general and private budgeted public administrations, provincial administrations, municipalities, villages and all expenses for the construction of the place of worship constructed by the permission of authorized public administration and director, the institutions where there ligious education is given under inspection of the Directorate of Religious Affairs, youth centers and youth and scouting camps belong to the Ministry of Youth and Sports or all donations and aids in kind or in cash made for the construction or for the maintenance of their activities of these establishments can be deducted.

b) The total cost of food, cleaning supplies, clothing and heating donated to the foundations and associations established as food banks for helping poor people in line with the procedures an principles determined by the Ministry of Treasury and Finance can be deducted from the income to be declared.

c) General and private budgeted public administrations, provincial administrations, municipalities, villages, non-profit associations, the foundations that are exempted from tax by President of the Republic, the expenses done by institutions which makes scientific research or the expenses for the studies that are supported by the Ministry of Culture and Tourism and all donations and aids made for these purposes can be deducted.

d) The total amount of the donations and aids in kind or in cash against receipt to the aid campaigns initiated by President of the Republic.
e) The total amount of the donations and aids in cash against receipt to Turkish Association of Crescent and Turkish Green Crescent Society except their commercial enterprises can be deducted.

10.4. Sponsorship Expenses

According to Article 89/8 of the Income Tax Law the sponsorship expenses done can be deducted from the income declared at annual tax return as follows:
• 100% of expenses for amateur sports,
• 50% of expenses for professional sports.

10.5. Donations and Aids Which Are Completely Deductible in Accordance with Other Laws

Donations and aids which are completely deductible in accordance with other laws are as follows:
• Donations made in accordance with the Law No. 222 on Primary Education and Training,
• Donations made according to the Law No. 278 on the Establishment of the Scientific and Technical Research Council of Turkey,
• Donations made according to the Higher Education Law No. 2547,
• Donations made according to the Social Services Law No. 2828,
• Donations and aids made according to the Law No. 2876 on Atatürk Culture, Language and History Institution,
• Donations and aids according to the Law No. 3294 on Encouraging Social Assistance and Solidarity,
• Donations and aids made in accordance with the Law No. 3388 on the Turkish Armed Forces Foundation,
• Donations made according to the Anti-Terrorism Law No. 3713,
• Afforestation, maintenance and protection costs in forests established according to the National Afforestation and Erosion Control Mobilization Law No. 4122,
• Donations and aids made in accordance with the Republic of Turkey Pension Fund Law No. 5434,
• Donations, aids and sponsorship expenditures made in accordance with the Law No. 6546 on the Establishment of Çanakkale Wars Gallipoli Historic Site Presidency,
• Donations and aids made in accordance with the Law No. 6569 on the Establishment of the Presidency of Turkish Health Institutes and Amendments to Certain Laws and Decree Laws,
• Donations, aids and sponsorship expenditures according to the Law No. 7174 on Cappadocia Area,
• Donations and aids made in accordance with the Law No. 7269 on Measures to be Taken and Aids to be Made in Case of Disasters Affecting Public Life.

In case the donations and aids are not in cash, the equal value of the donated property or the right; if the equal value is not exist then the value determined by the Assessment Committee according to provisions of the Tax Procedure Law shall be taken into account.

Source: Revenue Administration of Republic of Türkiye
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.