Inheritance Tax
In Turkey, inheritance tax is applied to the assets inherited by legal heirs after the death of an individual. This tax is calculated based on the total value of the inheritance as follows:
| Tax Base | Through Inheritance (%) | Gratuitous Transfers (%) |
| Up to 1,700,000 TL | 1 | 10 |
| Next 4,000,000 TL | 3 | 15 |
| Next 8,700,000 TL | 5 | 20 |
| Next 17,000,000 TL | 7 | 25 |
| Exceeding 31,400,000 TL | 10 | 30 |
Regardless of where a Turkish citizen passes away, their heirs must file an inheritance declaration and pay the corresponding taxes to the Turkish Republic. The taxation of overseas assets depends on whether Turkey has a tax treaty with the country in question. In the absence of such a treaty, heirs may need to resolve these matters through local courts.
Inheritance Procedures
The transfer of inheritance in Turkey involves the following steps:
- Obtaining Documentation: Documents such as the death certificate, an inheritance certificate from a notary or civil court, real estate valuation letters from municipalities, and account statements from banks must be obtained.
- Preparing the Inheritance Declaration: Using the collected information, an inheritance declaration is prepared and submitted to the relevant tax office.
- Payment of Taxes: The calculated tax is paid, and a “Tax Clearance Certificate” is issued by the tax office.
- Transfer of Assets: Heirs can register the inherited assets in their names using the necessary documents.
Wills and Legal Distribution
Turkish citizens can leave a will before their death. If no objections are raised, the inheritance is distributed according to the will. In case of objections, the Turkish Civil Code governs the distribution, and courts resolve disputes. Legal inheritance is proven through family trees and blood relation evidence.
Gift Tax
When a Turkish citizen gifts their assets:
- Assets in Turkey: A title deed fee is paid.
- Assets Abroad: The applicable country’s legislation governs the transaction.
Income Tax
For Turkish citizens living abroad, the taxation of income is governed by the following rules:
- Non-residents are not required to pay Turkish taxes on income earned abroad unless Turkey has no double taxation agreement with the relevant country.
- Non-residents are not obligated to declare their foreign assets in Turkey.
- Turkish citizens earning rental income from properties in Turkey must file a tax declaration.
Citizenship by Investment
The following investment options allow individuals to acquire Turkish citizenship:
- Real Estate Investment: Purchasing property worth at least $250,000 and placing a restriction on its sale for three years.
- Capital Investment: Investing a minimum of $500,000 in capital.
- Job Creation: Creating employment for at least 50 people.
- Bank Deposit: Depositing at least $500,000 in a Turkish bank for three years.
- Investment Funds: Purchasing participation shares in real estate investment or venture capital funds worth $500,000 and holding them for three years.
Individuals who acquire citizenship must declare their foreign assets if they bring them to Turkey.
Conclusion
Understanding the tax implications and legal procedures surrounding inheritance, gifts, income, and investment is essential for both Turkish citizens and foreigners with ties to Turkey. Whether dealing with inherited assets, planning a gift transfer, earning income, or acquiring citizenship through investment, complying with Turkish tax laws and regulatory requirements ensures a smooth and legally sound process.
Given the complexity of cross-border tax matters and inheritance laws, seeking guidance from experienced professionals can help individuals make informed decisions, avoid legal disputes, and optimize their financial outcomes. For tailored advice and support in navigating these procedures in Turkey, feel free to contact us.
