Turkey Taxes for US Expats: 2023 Guide

Turkey Taxes for US Expats: 2023 Guide

Turkey Taxes at a Glance

  • Primary Tax Forms: Individual income tax return
  • Tax Deadline: March 31 (February 28 for income derived solely through trading activity)
  • Currency: Turkish Lira (TRY)
  • Population: 84.78 million
  • Capital City: Ankara
  • Primary Language: Turkish
  • Tax Treaty: Yes
  • Totalization Agreement: No

Life as an Expat in Turkey

Nestled partly in Europe and mainly in Asia, Turkey is a Middle Eastern country with a vibrant culture and deep history. With a mix of subtropical, coastal climates along the Aegean or Mediterranean Seas and snowy, cold winters in the eastern parts of the country, Turkey is home to 84.78 million people, including thousands of American expats. Knowing how Turkey’s taxes for US expats work is essential if you’re living in Turkey or considering moving.

Knowing your tax obligations can help you stay compliant while living and paying taxes in two countries. 

US Expat Taxes in Turkey

In general, when living abroad, you must pay both your US taxes and taxes to the country where you’re living. As a US expat in Turkey, you’ll pay taxes to both countries. The good news is Turkey and the US have a tax treaty preventing you from getting taxed on the same income by both countries. This means you’ll still need to pay relevant taxes in Turkey but can write off the amount you paid on your US taxes (unless you are claiming another, more favorable tax break).

Who has to File Taxes in Turkey?

Both residents and non-residents of Turkey must pay income tax. Residents must pay tax on all their income, both domestic and foreign-earned sources, while non-residents are only taxed on their Turkish-sourced income.

However, not all residents and expats have to file tax returns in Turkey. If your income is sourced from an employer that withholds taxes, you do not need to file a tax return. However, you’ll likely need to file an individual tax return if you have self-employment or business income.

Who Qualifies as a Tax Resident in Turkey?

If you’re a resident of Turkey, you’ll owe tax on both Turkish and foreign income. However, non-residents are only on the hook to pay tax on income earned in Turkey. Non-residents are not taxed on their foreign-earned income.

Turkey Resident Qualifications

You’re considered a resident of Turkey if:

  • You live in the country for 183 or more during a calendar year
  • You are a Turkish national but have tax residency in another country

Non-resident Qualifications in Turkey

If you lived in Turkey for less than 183 days during a calendar year (or if some of those days were not consecutive), you might not be a resident. In this case, you’re taxed as a non-resident. This means you’ll only owe taxes on income earned in Turkey,

Income Tax in Turkey

Turkey taxes residents progressively — the more you earn, the higher your income tax rate.

Income tax rate in Turkey

Income tax bracketTax rate
1 TRY – 32,000 TRY15%
32,001 TRY – 70,000 TRY20%
70,001 TRY – 250,000 TRY27%
250,001 TRY – 880,000 TRY35%
880,001 TRY and up40%

Income tax rates for non-employment income (income earned outside wages) are slightly different.

Here’s how Non-employment Income is taxed in Turkey:

Non-employment Income tax bracketTax rate
1 TRY – 32,000 TRY15%
32,001 TRY – 70,000 TRY20%
70,001 TRY – 170,000 TRY27%
170,001 TRY – 880,000 TRY35%
880,001 TRY and up40%

Other Tax Situations in Turkey

Self-employment Tax

In Turkey, freelancers and self-employed individuals are prohibited from participating in the Social Security benefits system. There is no self-employment tax in Turkey.

Corporate Tax

For the 2022 tax year, businesses in Turkey pay a flat tax rate of 23% on all taxable corporate profits. This number will drop down to 20% in 2023.

Value-added Tax (VAT)

In Turkey, consumers pay value-added tax when purchasing goods or services. This is similar to sales tax in the US. 

The flat VAT rate in Turkey is 18%. However, some items have a discounted rate, and VAT can range from 1% to 18%.

Wealth Tax

There is no wealth tax in Turkey.

Inheritance Tax

If you receive a gift through inheritance or donation, it’s subject to inheritance and gift taxes ranging from 1% to 30%. You can pay inheritance and gift tax over three years.

Property Tax

In Turkey, property tax is paid to the Ministry of Finance. Property taxes vary depending on location but generally range from 0.01% to 0.03%. Turkey’s Residences valued at more than 6,173,000  million TRY are subject to a 0.3% to 1% tax.

Social Security

Turkey requires employees and employers to contribute to Social Security premiums. The rate employees pay into Social Security breaks down to 14% for Turkish nationals and 15.5% to 20.5% for employers. 

Do the US and Turkey have a Tax Treaty?

Yes, Turkey has a tax treaty with the US, which means you’re protected from paying double taxes on the same income.

Does Turkey have a Totalization Agreement with the US?

No. Turkey does not currently have a totalization agreement in place with the US. A totalization agreement helps protect expats from paying Social Security contributions on the same income in both the US and a foreign country like Turkey. This means US expats living in Turkey may pay into both countries’ social security systems.

What Tax Forms do US Expats in Turkey need to file?

Americans living abroad in Turkey may need to file a tax return in Turkey and the United States. However, you do not have to file a tax return form if you only earn income through an employer in Turkey.

If you own your own business or have self-employment income, you must file an annual tax return.

The Turkish tax year is the same as the US — January 1 – December 31 — and if you have to file an income tax return, it’s due by March 31.

Get Help with Your Expat Taxes

Now that you know the tax rules US expats living in Turkey must follow, we hope you better understand how to file your tax return this year. If you still have questions or want help filing your return, reach out to Greenback Expat Tax Services.

Start your taxes today with the guidance and support of one of our expert accountants.

Filing expat taxes doesn’t have to be a hassle. Start your filing process with Greenback today.

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