Corporate Tax System in Turkey
Corporate tax is the tax on corporate earnings. It is calculated over the net corporate income earned by the taxpayers within an accounting period. The institution mentioned in the corporate tax is different from the legal person. Capital companies are recognized as institutions. Individual companies are not accepted as institutions even if they have legal personality.
Each taxpayer submits one tax return for the entire amount of tax due. In summary, separate declarations are not submitted for taxpayers' branches, agencies, buying-selling offices, stores, manufacturing plants, or other workplaces affiliated to them. Although all these mentioned workplaces have separate accounting and capital, the taxpayer must submit a single statement.
Who Pays Corporate Tax?
Under the first article of the Corporate Tax Law, institutions from which corporate tax is taken are:
Capital companies (joint-stock, limited, limited partnership companies whose capital is divided into shares)
Economic public institutions
Economic enterprises belonging to associations or foundations (unions are considered as associations; communities are considered as foundations)
Among the institutions subject to Corporate Tax, whose legal (the center indicated in the founding laws, main statutes, or contracts of taxable institutions) or business center (the center where transactions are actually collected and managed) is located in Turkey are considered as full-fledged taxpayers and are taxed on the whole of their earnings both inside and outside Turkey.
Those who do not have a legal or business center in Turkey are considered as foreign-based taxpayers and are taxed only on their earnings in Turkey.
Corporate Tax Rate
The corporate tax calculated on the net corporate income earned by the taxpayers within an accounting period is collected as the 20% of corporate income.
Recording Expenses in Corporate Tax Return
Taxable income is taxed on its net amount. According to Article 40 of the Income Tax Law, you can calculate the taxable amount by deducting some of your expenses from your gross income.
Losses arising from the commercial activities of the institutions can be deducted from the earnings arising in the following periods. In the corporate tax return, the losses in the declarations of previous years can be deducted from the corporate income, provided that the amounts for each year are shown separately and not transferred for more than 5 years.
Corporate Tax Payment Periods
First period: January, February, March
The second period: April, May, June,
The third term: July, August, and September.
Payments for the first semester should be made by May 14th at the latest, August 14th for the second semester, and by February 14th for the third semester. Payments can be made through contracted banks.