Income Tax Law Draft In Turkey: Projected Some Of Basic Amendments

Dr. Özgür BİYAN


 In order to able to make combine to Income Tax Law (since 1961) and Corporate Tax Law (since 2007) and include both natural persons and corporations, a new income tax law draft was prepared and sent to Turkish Grand Assembly. It was expected to take effect until New Year. In this article, basic amendments are stated shortly.


Under article 2nd of draft, some notions are explained clearly; minimum wage, child, permanent representative, spouse, business center, workplace, legal center, corporate. Minimun wage, child, spouse, workplace and legal center notions are received from administrative and official regulations like circulars, communiques and rulings. On the other hand, permanent representative and business center notions are re-qualified widely.


It was understood from draft that income concept are not change clearly and same with effected income tax law. The income tax is levied on the income of individuals. The term individuals mean natural persons. But inherently corporations are included to taxpayer category. An individual’s income and corporate income may consist of one or more income elements listed below:

– Business profits,

– Agricultural profits,

– Salaries and wages,

– Income from independent personal services

– Income from immovable property and rights (rental income)

– Income from movable property (income from capital investment)

– Other income and earnings without considering the source of income.


According to income tax law draft, notion of craftsmen exemption are clarified. Under effected income tax law craftsmen exemption is considerable restricted and put in order just some craftsmen branches. But with new draft, this craftsmen branches ranked strictly and written to draft text. Thus, craftsmen exemption right may use just specific craftsmen groups. On the other side, it was given a wide authority to Ministry of Finance, so The Ministry may use his authority and expand to craftsmen groups if he wants.


Under article 14th, a new application “custom construction business” was regulated. This article is arranged to construction business of flat received for landownership. This business has been carried out by circulars, communiques and rulings. Thanks to this draft article, it is included to law text clarify. According to article 14/3, hereinafter, construction business of flat received for landownership is considered a business profit for landowners. But for this, there must be gain sharing between landowner and construction firm. In this case, landowners have to make registration to tax administration as taxpayer. On the other side, gross sum of the areas covered of properties which relinquished for landowner, are important for taxpayer registrations. For example, if gross sum of the areas covered of properties which relinquished for landowner does not exceed to 500 square meter, in this case not necessary a registration for landowner.


The proceeds obtained by authors, interpreters, sculptors, calligraphers, painters, composers, computer programmers and inventors and their legal heirs, by publishing their Works such as poems, stories, novels, articles, scientific researches and studies, software, interviews, cartoons, photographs, films, video bands, radio and television scripts and plays by means of newspaper, magazine, computer, internet, radio, television and video or by selling their works in form of books, CD, floppy disc, painting, statue and musical notes and patent letters of those or by transferring and assigning or leasing their rights on those shall be excluded from personal income tax.

According to article 30/8 of draft, this exclusion is restricted. Hereinafter, if these gains owners earn 188.000 Turkish Liras or more, they have to filling return and taxed from percentage 15 to 35. And also they will have a new right: lump sum expenses. If they would like, they may benefit deduction of lump sum when they fill return.


It was made new amendments on:

– Stoppage rates and categories.

– Aggregation method of income and declarations.

– Payment of taxes and tax return periods.

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