What is Self-Employment Income in Turkey?
Self-Employment Income in Turkey refers to earnings generated through professional, scientific, or artistic activities conducted independently, without an employer, and without a commercial nature. According to Article 65 of the Personal Income Tax Law (PITL), all forms of self-employment income in Turkey fall under this category.
Income earned by arbitrators, freelancers, and partners in unlimited, limited, and ordinary partnerships through self-employment activities in Turkey is also classified as self-employment income.
Who is Considered a Self-Employed Person in Turkey?
A self-employed person is someone who regularly performs professional activities independently, generating self-employment income in Turkey. Having another job does not change this classification. The following professionals are also considered self-employed in Turkey:
– Freelancers, including consultants, lawyers, and musicians working in Turkey.
– Notaries, stock market agents, and customs brokers operating in Turkey.
– Partners in unlimited and ordinary partnerships in Turkey, and active partners in limited partnerships.
– Independent professionals such as midwives, circumcisers, medical officers, petitioners, and guides in Turkey.
How is Self-Employment Income Determined in Turkey?
In Turkey, self-employment income is calculated by subtracting professional expenses from total revenue earned within a tax period. Receipts from clients, whether in cash, in kind, or as benefits, are included in taxable income.
Taxable and Non-Taxable Income for Self-Employed Individuals in Turkey:
✔️ Taxable Income in Turkey:
– Professional fees earned in Turkey
– Reimbursements for work-related expenses in Turkey
– Income from selling assets subject to depreciation
❌ Non-Taxable Income in Turkey:
– Payments received for taxes, duties, fieldwork, expertise, and legal appraisals (if fully spent for these purposes in Turkey)
Tax Deductible Expenses for Self-Employed Professionals in Turkey
Certain business-related expenses can be deducted from self-employment income in Turkey, reducing tax liability. Common deductible expenses include:
✔️ Office & Workspace Costs in Turkey
– Rent paid for office space (or half of the rent for a home office in Turkey)
– Heating, electricity, and maintenance costs
✔️ Work-Related Travel & Vehicle Expenses in Turkey
– Business travel and lodging expenses in Turkey
– Up to 70% of expenses related to business vehicles in Turkey
– Up to TRY 17,000/month for leased passenger cars in Turkey
Tax Exemptions for Self-Employed Persons in Turkey
1. **Tax Exemption for Artists and Writers in Turkey (PITL Article 18)**
Authors, composers, painters, programmers, and inventors in Turkey who earn income from their published works, performances, or intellectual property rights are exempt from personal income tax up to TRY 1,900,000.
2. **Tax Exemption for Young Entrepreneurs in Turkey**
Entrepreneurs under 29 years old who register for personal income tax in Turkey for the first time are exempt from paying income tax on up to TRY 75,000 annually for the first three years.
3. **Tax Exemption for Foreign Exhibitors and Fair Participants in Turkey**
Foreigners earning income from exhibitions and fairs in Turkey, authorized by the government, are exempt from personal income tax, provided they have no permanent establishment in Turkey.
Key Takeaways on Self-Employment in Turkey
✔️ Self-employment income in Turkey covers all freelance, consultancy, and independent professional activities.
✔️ Self-employed individuals in Turkey must track revenues and deductible expenses for tax purposes.
✔️ Various tax exemptions exist in Turkey, including those for artists, young entrepreneurs, and foreign fair participants.
Need Help With Self-Employment Tax in Turkey?
📌 Whether you’re a freelancer, consultant, or entrepreneur in Turkey, understanding tax obligations is crucial. Contact a tax consultant in Turkey to optimize your tax strategy and take advantage of applicable exemptions and deductions.
Conclusion
Self-employment income in Turkey comes with certain tax rules, deductions, and exemptions. The key to staying fully compliant is to stay informed. Contact us for clear and reliable guidance on your self-employment taxes in Turkey.
