Do you want to incorporate in Turkey? This article explains the tax laws in Turkey for a LLC which is the most common legal entity in Turkey.
Turkish companies are liable to tax on their worldwide income. The headline tax rate for offshore income, from our research, and these things do change, is 20%. Turkey may have certain exemptions to transfer income accrured abroad. Taxes are reasonable in Turkey as the headline corp. tax rate is 20%. This ranks Turkey as 70th overall in terms of corporate tax rate worldwide.
The valued added tax rate is 18.00%, this ranks Turkey as 116th overall in terms of VAT taxation rate internationally. In terms of other taxation, an employer will contribute 22.50% to the equivalent of a social security fund and an employee will contribute 14.00%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 80hours. Contributing to this is the number of yearly labor tax payments, which is 1 in TR.
Thin cap standards are officially enacted. This refers to any sort of restrictions on given company with respect to debt-to-asset ratios.
Dividends distribution between resident companies are tax-exempt. Dividends received from foreign companies may be subject to corporate income tax. However an exemption applies, if paying company is a LLC or a corporation, the recipient owns at least 10% of the paid in capital of the distributor, profits were taxed on source at a CIT of at least 15%, and the dividends are received by the date the corporate tax return is due. A dividend are payments of earnings of the business, passed by the board of directors, to shareholders.Dividends can be one of the following stock, cash, or property.
Capital Gains are usually considered ordinary income and subject to corporate income tax standard rates. However, those from the sale of domestic participation may be 75% exempted if the property has been held at least two years. Turkish-source and foreign source Capital Gains derived by a Turkey International Holding Company may be exempted under certain conditions. A capital gains tax is levied on the profits that a corporation or natural person realizes when they sell sells a capital asset for a price that is higher than the purchase price.
The interest withholding tax rate is estimated at 10%. Which means that the taxman expects relevant legal entities to automatically withhold 10% of interests remitted abroad, unless those are paid to international financial entities, where an exemption may apply. The dividends withholding tax rate is 15%. This should be interpreted that the taxman expects LLC's to withhold 15% of dividends remitted abroad. The royalties withholding tax rate is 20%. This means that the relevant tax authorities expects LLC's to pay tax on 20% of payments of royalties made to non-residents. Withholding tax rates may be reduced under a tax treaty.
There is no known tax on wealth in Turkey. There are inheritance, transfer and real estate property taxes in Turkey. There are widely used R&D initiatives that provide tax incentives in TR.
The above is not tax or legal advice for your particular situation. We can refer you to a lawyer in Turkey who can answer all your questions. Click the free consultation button above.
It takes approximately 49 hours to file and prepare documents for a Turkey Civil Law (Swiss).
The corporate tax is approximately 20% which is 70 in the world.
Owners of a company in Turkey are not allowed to carry back a loss and may be allowed to carry forward a loss for 5 years.
The vat rate in Turkey is 18% which ranks 116 in the world.
Thin capitalization rules are in effect. A company is thinly capitalised when there is a greater proportion of debt than equity. The minimum capitalization for a Turkey Civil Law (Swiss) is 2,500.
A corporate director is not permitted, meaning this country is not a good option if you are setting up a structure where you want to protect director liability.
The directors are disclosed in the public registry of Turkey, Turkish Trade Registry Gazette. Shareholders are disclosed in the Turkish Trade Registry Gazette.
Typically companies take 1 day to setup and there are 3 director(s) required and 5 shareholder(s) required at the time of incorporation.
Overall we think Turkey is a ok option and have given it a score of 63 as an IO score, using the Incorporations.IO proprietary formula.
We can help you form a company in Turkey. Click the button above for a no-obligation quote. We will provide you with all the necessary documents to open a bank account as well as a registered office in Turkey, which is required by law.
We can help you with your incorporations needs for an initial payment of just $1000.
Easy Step by Step Process:
The standard process typically takes between two (2) to three (3) weeks depending on when we receive all the required information from you. Once we receive your information, we will email you a complete set of documents for your review within 3 working days upon confirmation of payment. After executing the documents, you will need to mail them to us and we will formally submit your application for filing with the Registry. The Registry will then take about 3-8 working days to process the incorporation and produce certificates necessary for opening your bank account.
Applying for Your Bank Accounts:
Incorporations.IO maintains close working relationship within our extensive network of partner banks to help you apply for and receive banking services that are most appropriate to your specific situation. From the time of verification of incorporation it can take (1) one week to (2) two weeks to apply for and receive a bank account. We work primarily with banks that allow for remotely opened accounts to ensure you are ready to do business as soon as possible.
Applying for Payment Processing:
We include introductions to payment processors or merchant accounts with all of our incorporation services. Whether you just need standard credit card processing or specialized services for high risk processing, we have partners that can assist you and are happy to help you with introductions that can empower your business.
Start Online or via Phone:
We can get started for you whenever you are ready via a US$1000 initial payment via credit card. I get notified whenever a payment is made here and would send out the welcome letter and initial forms we would need within 12 hours. If you prefer, we can also process via a phone or Skype call.
|Isle of Man||TIEA||2012-09-21|
|Bosnia and Herzegovina||DTC||2005-02-16|
|United Arab Emirates||DTC||1993-01-29|
Law No. 6762 dated 2 july 1956 Enacted on 29 June
Preliminaries Field of application of the code
I- Commercial clauses
II- Commercial usage and custom:
they are or should be known to them.
III- Commercial affairs:
In general : 1 – Definition :
II- Acts incompatible with good faith:
1- Discrediting others or their goods, their activities, or the products of their work or their commercial affairs by means of wrong, deceitful or uselessly offensive statements;
2- Giving information contrary to truth regarding the morality or financial capacity of another person;
3- Giving wrong or deceitful information regarding one’s own situation, goods and the products of one’s work, one’s commercial activitiy or commercial affairs of acting in the same manner regarding third persons and putting them in a situation above their competitors.
4- Acting as if one had obtained a distinction, degree or reward without having obtained the same and trying to create thus the impression that one has exceptional capacities or using false titles or professional names which are liable to create this impression.
5- Trying to create confusion with the goods and products of the work, the activity or the commercial undertaking of another person or having recourse to measures likely to create this confusion, particularly using names, titles, marks, signs and similar distinctive means legally used by another person, or selling or keeping for a reason other that personal needs, goods giving place to confusion, knowingly or unknowingly.
6- Assuring or promising to the employees, agents or other assistans or third persons advantages to which they are not entitled with a wiev or in a manner to secure advantages for self or for others by inciting them to fail in their duty.
7- Deducing the employees, agents or other assistants and getting them to divulge or obtain the trading or manufacturing secrets of their employer or of his agents.
8- Taking an illicit advantage from trading or manufacturing secrets obtained or learnt in a manner incompatible with good faith or divulging them to others.
9- Issueing certificates of good conduct or capacity, contrary to truth so as to deceive persons of good faith.
10- Failing to comply with the conditions of working life determined by laws, regulations, contracts and professional or local customs which are also effective as regards competitors.
B) Juridical liability: 1. Miscellaneous clauses:
(a) the establishment of the existence of unfair competition;
(b) the prevention of unfair competition;
(c) the suppression of the material conditions resulting from unfair competition and, if unfair competition rests on untrue or deceitful statements, the rectification of these statements;
(d) compensation of damages, if there is a fault;
(e) the payment of moral damages in case of existence of the circumstances in Section 49 of the Code of Obligations.
The judge may also order the payment of the value of advantages which the defendant might secure through unfair competition, as damages in favour of the plaintiff and in accordance with the provision Paragragh (d). Customers whose economic interests have been injured through unfair competition may also open the actions indicated in the first paragraph. Chambers of Commerce and Industry, craftsmen’s associations, Exchanges and other professional and economic unions empowered to protect the economic interests of their members according to their statutes may also open the actions indicated under Paragraphs (a), (b) and (c) where their members or the members of their branches have the right to sue in accordance with the first and second Paragraphs. Any judgment passed against a person in pursuance of sub-paragraphs (a) and (b) of the first Paragraph shall also be enforceable against persons having –1 033obtained directly or indirectly the goods which are the object of unfair competition.
II- Liability of employer:
III- Responsibility of the press:
(a) If the article or the advertisement have been published without the knowledge or the approval of the author of the article or of the advertiser;
(b) If it is refused to disclose the identity of the person having written the article or given the advertisement;
(c) If, for other reasons, it is impossible to find out the author of the article or the advertiser or to sue them before a Turkish court; These actions may be brought also against the editor in chief and if it is an advertisement, against the advertising manager, if the editor in chief or the advertising manager have not been designated or do not exist, against the publisher and if he has not been designated either, against the printer. Furthermore, if a fault can be attributed to the editor in chief the advertising manager, the publisher or the printer, an action may be brought against the persons who are at fault, without taking into account the foregoing order. The provisions of the Code of Obligations apply for the actions indicated under subparagraph (d) and (e) of the first Paragraph of Section 58.
IV- Publication of the judment
VI- Measures of conservation:
C) Penal liability: I- Punishable acts:
2- Anyone who intentionally supplies untrues or deceitful information regarding his personal situation, his goods, the products of his work, his commercial activity and his business so as to have his proposals and offers preferred to those of his competitors;
3- Anyone who seduces employees, agents and other assistants in order to get them to disclose the trading and manufacturing secrets of his employer or principals;
4- Anyone who learns from employers or agents that their worker employees or agents commit an act of unfair competition liable to be punished, when doing his work, and does not prevent this act or does not rectify statements contrary to truth; Shall, on a complaint made by one of those who are entitled to bring a civil action under section 58, be sentenced by the criminal court to imprisonment for a term of one month to one year or to a fine of 500 to 1.000 liras, or to both penalties. Anyone who continues the act of unfair competiton, unchanged or with accessory changes, not withstanding the final judgment concerning the prohibition of unfair competition shall be liable to imprisonment for a minimum term of six months and to a heavy fine of 5.000 to 10.000 liras and the offender shall be prosecuted ex officio.
II- Penal liability of legal entities: