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. The circumstances requiring an Annual Income Tax Declaration for Employees in Turkey are detailed below with updated figures.
1. Income from a Single Employer
As of 2024, individuals earning more than 1,900,000 TRY from a single employer are required to submit an annual income tax return. This declaration must be prepared and submitted to the tax office within March.
If the individual is already required to file a tax return due to other sources of income, they must also include their wage income in that declaration.
2. Income from Multiple Employers
Employees earning wages from multiple employers must file an annual income tax return if:
- The total income from all employers (including the first employer) exceeds 1,900,000 TRY.
- The total wage income from the second and subsequent employers exceeds 150,000 TRY.
In such cases, the annual tax return must be prepared and submitted to the relevant tax office.
3. Income from Foreign Employers
Individuals earning wages from an employer abroad must file an annual income tax return regardless of the income amount, provided they are tax residents in Turkey.
Exception:
Employees working abroad but employed by a liaison office or a regional management center in Turkey may be exempt from filing an annual income tax return if they meet the exemption criteria.
4. Deductions on the Annual Tax Return
As of 2024, individuals filing an annual income tax return may benefit from the following deductions:
- Education and healthcare expenses: Up to 10% of the declared income.
- Donations and aids: Contributions made to public institutions, tax-exempt foundations, or public-benefit associations.
- Insurance premiums: 50% of life insurance premiums and 100% of personal insurance premiums (covering death, accident, illness, health, etc.).
Limitations:
- The deductible amount cannot exceed 15% of the declared income or the annual minimum wage.
5. Tax Offsets on Declared Income
From the income tax calculated on the declared wage:
- Taxes paid via withholding in Turkey can be deducted.
- Income taxes paid abroad for wages earned from foreign employers can also be credited against the total tax liability.
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.