According to the Turkish Income Tax Law, wages include monetary payments, in-kind benefits, and other earnings convertible into money, provided by an employer in exchange for services. In addition to corporate taxpayers, restructuring professionals in Turkey often advise high-earning individuals and employees with complex compensation structures on how to comply with evolving income tax regulations. The circumstances requiring an Annual Income Tax Declaration for Employees in Turkey are detailed below with updated 2025 figures.
1. Income from a Single Employer
As of 2025, individuals earning more than 4,300,000 TRY in total annual wage income from a single employer are required to file an annual income tax return.
If the individual is already obliged to file a return due to other income (e.g., rental, capital gains), their wage income must also be included in the same return, even if it was taxed by withholding.
This return must be filed in March 2026.
2. Income from Multiple Employers
Employees earning wages from more than one employer are required to submit an annual income tax return if:
- The total income from all employers exceeds 4,300,000 TRY, and
- The income received from the second and subsequent employers exceeds 330,000 TRY (even if withholding was applied at source).
The annual tax return must be submitted in March 2026 to the tax office or through the Revenue Administration’s online platform.e.
3. Income from Foreign Employers
Individuals who are tax residents in Turkey and receive wages from foreign employers must file an annual income tax return regardless of the income amount, since no withholding is applied at source in Turkey.
Exception:
If an employee is physically working abroad but is employed by a liaison office or regional management center registered in Turkey, and meets the specific exemption conditions (e.g., not engaged in commercial activity), the income may be exempt from Turkish taxation.
4. Deductions on the Annual Tax Return
Employees who file an annual tax return may benefit from the following deductions:
- Education and health expenses: Up to 10% of the declared income (paid within Turkey).
- Donations and aid: Made to public institutions, tax-exempt foundations, or public-benefit associations (can be 100% deductible under certain conditions).
- Insurance premiums:
- 50% of life insurance premiums,
- 100% of other personal insurance premiums (accident, health, disability, etc.).
Limitations:
- The total deductible amount cannot exceed 15% of the declared income, or the amount of the annual minimum wage for 2025 (to be determined by Social Security Institution).
5. Tax Offsets on Declared Income
From the income tax calculated on the declared wage:
- Taxes paid via withholding in Turkey (e.g., monthly payroll tax deductions) are fully deductible.
- Income taxes paid abroad (on foreign-sourced employment income) may also be credited against Turkish tax, subject to double taxation agreement provisions and documentation.
Conclusion
Navigating the annual income tax declaration process in Turkey can be straightforward if you’re aware of the current thresholds and legal requirements. Whether you’re earning from a single employer, multiple employers, or abroad, it’s essential to understand your obligations under the Turkish Income Tax Law.
With the 2024 updates, individuals must pay close attention to their total income levels, applicable deductions, and filing deadlines. Ensuring accurate reporting not only keeps you compliant but also allows you to take full advantage of available deductions and tax credits.
For professionals and companies alike, working with experienced advisors can make a significant difference. At ÖzbekCPA, we assist clients in preparing and filing income tax returns in compliance with Turkish regulations, including cross-border taxation matters.
