According to the Income Tax Law No.193, incomes of real persons are
subject to the income tax. Income items subject to the income tax are
commercial incomes, agricultural incomes, salaries / wages, incomes
from independent personal services, incomes from immovable property
and rights (rental incomes), incomes from capital investment and other
income and gains.
Non-resident taxpayers are real persons who are not settled in Türkiye in
other words who do not have their residences in Türkiye and who do not
reside in Türkiye for a continuous period of more than six months within
one calendar year. Non- resident taxpayers shall be taxed only on income
and gains which they have obtained in Türkiye, they do not file a tax return
in Türkiye for income and gains which they have obtained in foreign
countries.
On the other hand, Turkish nationals who live abroad with a residence or
work permit are also considered within the scope of the non-resident
taxpayer. According to explanations made in the Communique Serial No.
210 of the Income Tax Law, Turkish nationals who live abroad for more
than six months with a residence or work permit shall be taxed on the
basis of limited liability in terms of income and gains which they have
obtained in Türkiye, except for Turkish nationals residing in foreign
countries due to their works affiliated with private enterprises whose
headquarters are located in Türkiye or public institutions.
The guidebook has been prepared to present explanations and samples
about the property and rights which are subject to the rental income,
amount of exception for rental income from house, limit for declaration in
workplace rental income, equivalent rental value implementation,
expenses which shall be deducted from declared rental income, tax
withholding in rental payments, taxation of rental income in terms of
Double Tax Prevention Agreements, time and form of rental income
declaration, tax schedule, calculation of income tax payable, payment
ways in terms of the taxation of those who rent out their property and
rights in 2021.
The guıdebook on rental ıncomes for non-resıdent taxpayers
In addition, explanations have made on how to file a tax return swiftly,
easily and safely via the Pre-filled Tax Return System serving 24/7, where
tax returns on rental incomes are prepared in advance and submitted for
the approval of taxpayers.
1. RENTAL INCOME
Incomes obtained from renting of the property and rights which are stated
in the Income Tax Law No.193 is defined as “income from immovable
property and rights” and are subject to the income tax in certain
conditions.
The liable persons of immovable property’s income are the owners,
tenants (persons having the rights to use actually), possessors,
servitudes and usufruct right owners of the property and their tenants in
the event of leasing of a rented property and rights.
2. PROPERTY AND RIGHTS WHICH ARE SUBJECT TO RENTAL
INCOME
Property and rights which are subject to the rental income are defined in
Article 70 of the Income Tax Law. They are mentioned as;
-Land, building, mineral water and underground water sources, mines,
stone pits, production places of sand and gravel, brick and tile fields,
saltworks and their component parts,
– Large fishing net fields and fishponds,
-Component parts of immovable properties leased separately and all
their installations, inventory stock and flooring,
-Rights registered as immovable property,
-Searching, operating and franchise rights and their licenses, patent
right, trademark, commerce title, any kind of technical drawing, design,
model, plan and cinema and television films, audiotapes and
videotapes, a secret formula belonging to an experience acquired in
industry, commerce and science or rights as right of usage or privilege
of usage on a production method,
-Copyrights,
-Ships and shares of ship and all the motorized shipment and unloading
vehicles,
-Motorized transfer and draw-frame vehicles, any kind of motorized
vehicle, machine and installation and their appurtenance.
3. OBTAINING OF RENTAL INCOME
Obtaining of rental income is bound to collection principle. In order to tax
the rental income in accordance with the collection principle, it should be
collected in cash or in kind.
3.1. Collection of Rental Income in Cash
Collection of rental income in cash states that the payment of rent in
Turkish Liras or in foreign currency. Received cheques are also taken into
account as collection in cash.
Rental income collected by the taxpayers relating to that year or
previous years is taken into account as the income of the year which it
is collected in.
Example, if 2018, 2019 and 2020 rental incomes are collected in 2021,
these incomes will be taken into account as the income of the year 2021.
Rental income relating to prospective years which is collected in
advance is not taken into account as the income of the year which it is
collected in but as the income of the years which the income is related to.
Example, if 2021, 2022 and 2023 rental incomes are collected in 2021,
each year’s rental incomes will be taken into account as the income of the
related year.
In terms of renting transactions in foreign currency, gross revenues in rental
incomes are determined according to the exchange rate announced by the
Central Bank of Republic of Türkiye on the collection date.
3.2. Collection of Rental Income in-kind
If the rental payment is collected in-kind (property, ware etc.), payments
are valued according to the Tax Procedure Law No. 213
3.3. Collection and Payment of Leasing by Means of Banks or Postal
Administration
According to the Income Tax General Communiqué Serial No. 268 and
298 which are published for the authentication with documents issued by
banks or postal administrations of the collections and payments that are
made in connection with the transactions regarding workplace and
residential rentals;
-For residence, 500 TL or over per month for each house; in case of
weekly, daily or similar short-term housing rental regardless of the
amount for those who obtain a rental income,
-For workplace, without a limitation of amount for those who lease out
their workplaces and their tenants
need to make the payments and collection of the leasing by means of
banks, financial institutions or postal administrations and are obliged to
authenticate their payments and collections through documents issued by
these institutions.
-Since receipt or monthly statement is issued for the payment and
collection while using mediums like depositing money, money order,
cheque or credit cart by means of banks, financial institutions or postal
administrations, these documents shall be accepted as certifying
documents. Payment and collection carried out via internet banking are
also evaluated in the same scope.
-The fine which shall be applied to persons who do not comply with the
aforesaid obligations is 5% of each transaction’s amount and it should be
no lower than the amount of special irregularity fine determined for that
year in accordance with the Repeating Article 355 of the Tax Procedure
Law
4. LOW OR NO VALUE FOR RENTAL INCOME
“The equivalent rental value” is taken as bases in case of low or no value
for rental income. According to this basis, equivalent rental income
principle shall be applied on the conditions of;
leaving the immovable property to the usage of other persons for free,
lower value of rental income of rented immovable property than the
equivalent rental value.
The equivalent rental value in rented buildings and lands is the rental
value determined by authorized specific authorities or courts.
If there is no renting determination or judgment for the aforementioned
building or land, the equivalent rental value is 5% of its real estate
tax value
The equivalent rental value in property and rights for other than buildings
or lands is 10% of their cost price. If this cost is not known, it is 10% of
determined values of them calculated in accordance with valuation of
property provisions of Tax Procedure Law.
Example: Taxpayer (A) gave up a flat valued 900.000 TL to one of his/her
friends without charge in 2021.
In this case, taxpayer (A) need to calculate his/her rental income on the
equivalent rental value.
The equivalent rental value: 900.000 x 5% = 45.000 TL. This amount
should be considered as income to be declared.
The equivalent rental value principle is not applied under the
following conditions:
-Leaving empty immovable properties to other person’s residence in
order to protect the immovable,
-Allocating the buildings to the residence of the property owner’s
mother, father, grandmother, grandmother, children, grand kid or
siblings (But, if more than one house allocated to the residences of
each of these persons, equivalent rental value is not calculated only for
one of these houses. Example, if owner of property has allocated two
houses to the residence of his/her child, it will not be calculated
equivalent rental value for one house and for the second one it will be
calculated.)
-Accommodating of relatives with the property owner in the same house
or flat,
-Leasing done by General Budget and by Annex Budget Offices, by
provincial administrations and municipalities and by other public
institutions and organizations.
5. EXCEPTION FOR RENTAL INCOME FROM HOUSE
The amount of 7.000 TL for rental income from house for the year 2021
(the exception amount of 9.500 TL for the year 2022) is exempted from
the income tax. If persons, who gain a rental income from house, obtain
an income less than the amount of exception that is determined annually
(the exception amount of 7.000 TL for the year 2021), they are not
required to file a tax return.
Example: Taxpayer (B) rented his/her house from 550 TL per month and
obtained 6.600 TL annually in 2021. In this case, since the rental income
from house is less than the exemption amount of 7.000 TL, it will not be
declared by the taxpayer (B).
In the case the rental income is not declared between the dates in time or
the rental income is understated, it will not be able to benefit from the
exception amount of 7.000 TL for the year 2021. However, those who
submit returns, before any determination is made by the administration,
on their own accord for their rental income which they did not declare or
include in their returns on time, will benefit from the related exception.
In case the rental income from house exceeds the amount determined for
exception, the amount of exception must be deducted from the rental
income to be declared in the annual tax return.
The exception applies only to rental income from properties that have
been rented as house. Taxpayers whose rental income from house
under 7.000 TL in 2021 do not file a tax return for these incomes
If there is a rental income obtained and declared at the same time both
from house and workplace, the exception applies only to the rental
income obtained from house, the exception does not apply to the rental
income from workplace.
Those who have to declare their income from commercial,
agriculture or independent personal services,
Regardless of whether a declaration is required or not,
those who obtain a rental income from a residence above
7.000 TL, of whose gross total amount of their income
including wage, income from capital investment, rental
incomes, other income and gains jointly or severally
exceeding the amount of 190.000 TL (the amount of the
third income bracket in Article 103 of the Income Tax Law
for the wages) for the year 2021,
cannot benefit from the exception amount of 7.000 TL in incomes
from immovable property and rights (rental incomes).
Example: In 2021, taxpayer (C) obtained the rental income of 26.400 TL
from his/her property that she/he leased out as a residence and the rental
income from his/her workplace of 66.000 TL which are taxed wholly by the
withholding and the wage of 132.000 TL.
Whether the exception will be applied or not for taxpayer (C)’s rental
income from his/her residence will be determined on the basis of whether
the total income obtained by taxpayer (C) in 2021 exceeds 190.000 TL or
not.
Since the total amount of income (24.600 + 66.000 + 132.000) exceeds
190.000 TL determined for the year 2021, it will not be possible to benefit
from the exception of 7.000 TL for the rental income from the residence of
26.400 TL.
In case more than one person has the ownership of a house, the taxation
of the rental income obtained from such house will be subject to 7.000 TL
(for the year 2021) of the exception separately for each proprietor.
Thus, if the inheritance is not shared, every inheritor will benefit from the
exception separately.
In case, a taxpayer obtains rental income from more than one house,
the exception shall be applied at once to the total amount of rental
income.
6. EXPENSES TO BE DEDUCTED WHEN DETERMINING RENTAL
INCOME
In the taxation of rental income, the net amount of the income obtained is
determined in two different ways as follows:
-Actual expenses method,
– Lump-sum expenses method (for other than those who lease out
rights).
-The selection of the actual expenses or the lump-sum method must cover
all immovable property, which means that it is not possible to choose the
actual expenses method for some part and the lump-sum expenses
method for the remaining part.
-Taxpayers opting for the lump-sum expenses method cannot return to the
actual expenses method unless two years have passed.
6.1. Deduction of Expenses in Actual Expenses Method
If the actual expenses method is chosen, following actual expenses can
be deducted from the gross amount of the rental income:
– Lighting, heating, water and elevator expenses paid by lessor for
rented property,
– Management costs which are measured according to the importance of
property and related with the administration of the rented property,
– Insurance expenses relating to the rented property and rights
– Interest of debts relating to the rented property and rights
– 5% of acquisition value of one rented house for 5 years beginning from
the date of acquisition (This deduction applies only to rental income of
the rented house; non-deductible part is not evaluated as
expenditure surplus. This deduction is not valid for houses acquired
before 2017),
The discount of 5% of the acquisition value will only be applied to
one real estate rented as a residence. If the rental income is obtained
from more than one real estate, this discount will not be
used for other real estates. Also, real estates rented as workplaces
will not benefit from the 5% expense deduction.
– Taxes, duties and fees paid for the rented property and rights and rates
paid to municipalities for expenses by lessor,
– Depreciation setting aside for rented property and rights, and heat
insulation and energy saving expenditures which are made by the
lessor and that increase the economic value of the real estate. (These
expenditures can be considered as cost if it exceeds 1.500 TL for the
year 2021.)
– Repair and maintenance expenses incurred by lessor for the rented
property,
– Rents and other actual expenses paid by sub-lessors,
– Rent of the house accommodated by the lessors who rent their own
property, (non-deductible part is not evaluated as expenditure surplus),
It is not allowed for taxpayers not residing in Türkiye, (including Turkish
nationals who reside abroad for a continuous period of more than six
months with a residence or work permit) to deduct the amount of rents
they pay in a foreign country from their rental income obtained in Türkiye.
-Cost of loss, detriments and compensations paid for rented property
and rights based on a contract, law or court decree.
Non-residents who have opted for the actual expenditure method
should keep the documents showing the expenses incurred
for a period of 5 years and submit to the tax office when required.
6.1.1. Calculation of Deductible Expenses in Case of Exception in
Actual Expenses Method
In case, a taxpayer chooses the actual expenses method and benefits
from the exception applied to rental income from house, the part of actual
expenses corresponding to the exception shall not be deducted from
gross revenues.
The part of deductible expenses corresponding to the taxable revenue will
be calculated using the following formula:
Deductible expenses = Total Expenses x Taxable Revenue*
Total Revenue
(*) Taxable Revenue = Total Revenue – Amount of Exception for Rental Income from House
Example: Taxpayer (D) rented his/her house in 2021 and obtained
66.000 TL of rental income. Taxpayer, who has no any other income,
incurred 16.500 TL of expenditure for his/her property and chooses the
actual expenses method.
The amount that taxpayer can deduct as actual expenses will be the
amount that corresponds to the taxable revenue of the total expense for
16.500 TL.
Taxable revenue = 66.000 – 7.000 = 59.000 TL
Deductible expense = (16.500 x 59.000) / 66.000 = 14.750 TL
In case, the amount of actual expense to be deducted from the rental
income is 14.750 TL.
6.2. Deduction of Expenses in Lump-sum Expenses Method
Taxpayers opting for the lump-sum expenses method can deduct the
lump-sum expense at the rate of 15% from their revenue against actual
expenses. The lump sum expense, for taxpayers who obtain a rental
income and who will be able to benefit from the residence exemption, will
be calculated over the remaining amount after deducting the exception
amount.
It is not possible to opt for lump-sum expenses method in the case of
renting rights. For example, taxpayers, who gain a rental income from
workplace and income from renting rights, must choose actual expenses
method in their income tax return.
Taxpayers who have opted for the lump-sum method can deduct
as a lump- sum expenses at 15% of their revenue. The lump-sum
expenses rate is determined at 15% of the revenue to be applied to
rental income from the date of January 1st, 2017.
7. IN CASE OF OCCURRING LOSS
At the adding up income, losses arising from part of the sources of
income (except those arising from other income and gains written in
Article 80 of the Income Tax Law) are deducted from the gains and losses
of other sources.
Any decrease occurring in the capital itself which is subject to income
from immovable property is not considered as loss and is not accepted as
expense when determining the gross income amount.
Losses arising from the expenditure surplus in the calculation of the net
amount of income from immovable property can be deducted from
income to be declared in the following years not for more than 5 years.
There are two exceptions for this rule
– In the event of any loss resulting from deducting the amount of the rent
of the house or lodging paid by the lessor from the rental income of
their house, such loss cannot be subject to deduction from the income
from immovable property to be obtained in the following years.
-Non-deductible part of the amount corresponding to 5% of the
acquisition value which has been subject to deduction of income from
the one immovable rented as house is not considered as an
expenditure surplus.
Accordingly, it is not possible to consider an expenditure surplus as loss
in these situation.
8. TAX WITHHOLDING IN RENTAL PAYMENTS
Persons, corporations and entities who rented property and rights in
accordance with Article 94 of Income Tax Law are obliged to withhold
income tax on the gross amount of payments made for rent.
Persons, corporations and entities in question that are tenants have to
withhold income tax from the gross amount of their rental payments at the
rate of 20%.
Pursuant to the President of the Republic of Türkiye Decision No. 2813
and dated July 30th, 2020; the withholding rate applied in accordance
with the Income Tax Law on rental payments made in cash or account
between the dates of July, 31st 2020 – December, 31st 2020 has been
determined as 10% and the effective date of the withholding rate, which
has been determined by various President Decisions issued later for a
provisional period, has been extended until September, 30th 2021
(including this date). Thus, the withholding rate will be applied as 10% for
rent payments made between the dates of July, 31st 2020 -September,
30th 2021.
This withholding tax will also be made from the rent paid in advance for
the upcoming months and years.
If tenants are taxpayers whose earnings are determined
in the simple earning basis; Since they have not obligation to
withhold taxes, they will not withhold on rent payments.
In case the immovable property leased out is used both as house and
workplace; the total rent is subject to the withholding tax as long as it is
used as workplace partially or in whole.
9. DECLARATION OF RENTAL INCOME
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;
– their rental income from house exceeds the tax exception amount
(7.000 TL for the year 2021) and,
– their rental incomes, which are not subject to the withholding, obtained
from leasing of the properties 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.
10. 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 2021 is 42.930,00 TL.)
The premiums paid to the individual retirement insurance cannot be
deducted.
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
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.
-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
-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.
-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.
-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:
-Law No. 222 on the Primary Education and Training,
-Law No. 278 on the Establishment of Turkish Scientific and Technical
Research Institution,
-Law No. 2547 on the Higher Education,
-Law No. 2828 on the Social Services,
-Law No. 2876 on the Atatürk High Institution of Culture, Language and
History,
-Law No. 3294 on the Improvement of Social Aid and Solidarity,
-Law No. 3713 on the Anti-Terrorism,
-Law No. 4122 on the National Afforestation and Erosion Control Mobilization,
-Law No. 7174 on the Cappadocia Area (including sponsorship
expenses),
-Law No. 7269 on the Assistance to be Made by Precautions to be
Taken Due to 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.
11. TIME AND FORM OF RENTAL INCOME DECLARATION
With regard to rental incomes subject to declaration for the period 2021;
non-resident taxpayers need to submit their returns concerning their
incomes from immovable properties between the dates of March
01st–31st, 2022.
-It is possible to file tax returns via the Pre-filled Tax Return System on
the internet.
-If non-resident taxpayers have tax representatives in Türkiye, they will
submit their returns to the authorized tax office of their tax
representatives’ location and if they do not have tax representatives in
Türkiye, they will submit their returns to the authorized tax office of
immovable property location.
-In accordance with the Law No. 3568, returns can also be submitted
via the e-Return System by signing an electronic return mediation
agreement with members of profession who have received a mediation
authority to submit an electronic return.
In the Pre-filled Tax Return System, returns will be deemed
electronically approved. If the return is sent through normal
postal service or private postal distribution companies, it will be
deemed to have been submitted on the date it arrives
on document registration date at tax office, and if it is sent as
registered (First Class Mail etc.), it will be deemed to have been
submitted on the date registered on envelope by PTT.
12. PRE-FILLED TAX RETURN SYSTEM
Taxpayers, whose incomes subject to the declaration composed of only
income from immovable property and right (rental income), wage, income
from capital investment, other income and gains or several of them, can
submit their returns, which the Turkish Revenue Administration has
prepared in advance and submitted for the approval of taxpayers, for
these incomes via the Pre-filled Tax Return System which is an
easy- to- use and a fast system.
Taxpayers who only obtain rental incomes, wages, income from capital
investments and other income and gains jointly and severally will be
able to benefit from the System.
You can access the System and the detailed information on the official
webpage (www.gib.gov.tr) of the Turkish Revenue Administration.
It is possible to log in to the Pre-fılled Tax Return System by means of;
https://hazirbeyan.gib.gov.tr (login by user or e-Devlet method or
foreigner identification number),
Interactive Tax Office,
Internet Tax Office.
Also, you can log in to the System 24/7.
Non-resident taxpayers who do not have the Turkish identification
number, registration in mernis system or do not have rental income
liability record at tax offices, they will submit their returns to the authorized
tax office of their tax representatives’ location if they have tax
representatives in Türkiye; if they do not have tax representatives in
Türkiye, they will use the system after being registered to the authorized
tax office where the immovable property is located.
Accordingly, in case there is not any liability record at tax offices and when
tax returns for rental incomes prepared on the System are approved
electronically, the tax liability registration at tax office and tax accrual
transactions in the name of a taxpayer are carried out automatically.
13. TAX SCHEDULE TO BE APPLIED
According to the Income Tax Law, the income tax is calculated by
applying the following tax schedule for rental incomes obtained in 2021.
On the other hand;
The tax schedule, which will be based on the taxation of incomes for the
calendar year 2022, is determined by the Income Tax General
Communiqué Serial No. 317.
14. TIME AND FORM OF TAX PAYMENT
The income tax calculated on annual income tax returns to be submitted
regarding rental incomes obtained in the year 2021 will be paid in two
equal installments in March and July of 2022.
– The first installment must be paid with the stamp tax until
March 31st, 2022.
– The second installment must be paid until August 1st, 2022. (As the
date of July 31st, 2022 coincides with the public holiday.)
Payments can be made on the official webpage (www.gib.gov.tr) of the
Turkish Revenue Administration (Interactive Tax Office and GİB mobile
application);
– by credit cards of contracted banks
– by bank cards or bank account of contracted banks,
– by credit cards, bank cards and other payment ways of banks
operating in a foreign country
Payments can also be made through;
– branches or alternative payment ways (online banking, phone banking,
mobile banking etc.) of contracted banks,
– PTT branches
– all tax offices.
You can learn your income tax using “Calculations”
section on www.gib.gov.tr
(ivd.gib.gov.tr → Calculations→ Rental Income Calculation)
15. RENTAL INCOMES FROM IMMOVABLE PROPERTY IN TERMS
OF DOUBLE TAXATION AGREEMENTS
Rental income from immovable property is mentioned in Article 6, titled
“Income from Immovable Property” and Article 12, titled “Royalties” of
Double Taxation Agreements that Türkiye concluded.
16. EXAMPLES RELATED TO RENTAL INCOME DECLARATION
Example 1: Taxpayer (A), living in Germany, leased out his/her flat in
Ankara and obtained 17.000 € as rental income in 2021. Taxpayer (A),
who has no other incomes to declare, preferred the lump-sum expenses
method.
On the date of collection, buying rate for Euro announced by the Central
Bank of Republic of Türkiye is assumed as 10,50 TL.
The income tax payable on the taxpayer’s rental income is calculated as
follows:
Example 2: Taxpayer (B), living in Poland, leased out his/her flat in
Antalya and obtained 20.000 $ as rental income in 2021. She/he
preferred the actual expenses method and she/ he has no other incomes
to declare. His/her total actual expense for this house is 6.600 $
On the date of collection and expenditure, buying rate for Dollar
announced by the Central Bank of Republic of Türkiye is assumed as
8,90 TL.
Total revenue = 20.000 $ x 8,90 TL = 178.000 TL
Total expenses = 6.600 $ x 8,90 TL = 58.740 TL
Taxpayers who have chosen the actual expenses method will not deduct
as expenses corresponding to the amount subject to the exception from
their income, they will only be able to deduct expenses corresponding to
the taxable revenue. For this, the expense part corresponding to the
taxable revenue must be calculated. Deductible expenses corresponding
to the taxable revenue is calculated as follows:
Deductible expenses = Total Expenses x Taxable Revenue
Total Revenue
*Taxable Revenue = Total Revenue – Amount of Exception for Rental
Income from House
= 178.000 TL – 7.000 TL
= 171.000 TL
Amount of expenses corresponding to taxable revenue (Amount of deductible actual expenses)
= 58.740 TL x 171.000 TL
178.000 TL
= 56.430 TL
The income tax payable on the taxpayer’s rental income is calculated as
follows:
Example 3: Taxpayer (C) who does not reside in Türkiye and lives in
France leased out his/her workplace in Bodrum and obtained 26.625 € as
rental income 2021. It has been withheld 27.562,50 TL (Net monthly rent
is calculated assuming 1.500 €.) on rents paid for the workplace.
At the date that the income is collected and the deduction is made, buying
exchange rate for Euro announced by the Central Bank of Republic of
Türkiye is assumed as 10,50 TL.
Total revenue from workplace (gross) = 20.625 € x 10.50 TL = 216.562,50 TL
The annual tax return will not be declared regardless of the amount for
workplace rental incomes which are taxed wholly by the withholding in Türkiye.
Example 4: Taxpayer (D), residing in Rome, leased out his/her flat in
Ankara and obtained 5.000 € as rental income in 2021. Also she/he
leased out his/her workplace in Ankara and obtained 10.312,50 € as
rental income in 2021. It has been withheld 13.781,25 TL (Net monthly
rent is calculated assuming 750 €.) on rents paid for the workplace.
She/he paid 60.000 TL for an invoice, including the VAT, to a private school
for the education of /his/her 12-year-old child in Türkiye, and
donated 20.000 TL in cash for a receipt to the aid campaign initiated by
the President. Taxpayer (D), who has no other incomes to declare,
preferred the lump-sum expenses method.
At the date that the income is collected and the deduction is made, buying
exchange rate for Euro announced by the Central Bank of Republic of
Türkiye is assumed as 10,50 TL.
Total revenue from workplace (gross) = 10.312,50 € x 10,50 TL = 108.281,25 TL
The workplace rental income which is taxed by the withholding will not be
declared regardless of the amount.
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.
Therefore, although the expenditure of 60.000 TL on the education has
been spent, the amount of 3.867,50 TL, which is 10% (38.675 X 10/100)
of the income declared, can be deducted. The total amount donated for a
receipt to the aid campaign initiated by the President will be subject to a
discount.
The income tax payable on the taxpayer’s rental income is calculated as
follows:
Example 5: Taxpayer (E), living in Madrid, rented out his/her workplace in
Malatya in 2021 to a taxpayer whose income subject to the simple
earning basis and obtained the total amount of 11.880 TL as workplace
rental income annually. Taxpayer (E), who has no other incomes to
declare, preferred the lump-sum expenses method.
The total workplace rental incomes of non-resident taxpayers, which are
derived from taxpayers in the simple earning basis and which are not
subject to the tax deduction and the exemption implementation, will be
declared regardless of the amount.
The income tax payable on the taxpayer’s rental income is calculated as
follows:
Disclaimer: The information in this article is provided for general information purposes only. It is not intended for a professional informational purpose specific to a person or institution. Although it is similar to the subject, each business may have different situations due to its own special conditions. For this reason, it is in your best interest to consult an expert before taking any decision that will affect your business based on the information provided in this article. Karen Audit or any of the persons or institutions it is associated with is not responsible for any loss or damage that may arise as a result of the use of the information contained in this document by private or official, real or legal persons, institutions and organizations.
