The following questions can be answered quickly and guide you through declaring rental income in Turkey. Once you have decided to invest in the Turkish real estate market and opt to rent your property out, you need to consider the options.
Rental income declaration for non-resident payers of tax in Turkey.
In Turkey, which assets are subject to rental income?
What is the best way to collect/obtain rental income?
In Turkey, are there any exceptions or discounts on rental income?
When measuring your rental income, what expenses can you deduct?
In Turkey, you must declare your rental income.
When is it necessary to declare?
When do you have to pay taxes in Turkey?
The basis of the taxation of rental income by non-resident taxable people in Turkey
Non-resident persons are only liable to a small extent for income earned in Turkey. A foreigner who spends less than six months in Turkey in a calendar year and whose ancestral home is not in Turkey is considered a non-resident taxable individual with limited liability in this case. Income earned in Turkey entails the presence of associated immovable property in Turkey and the use and valuation of these properties and rights.
Tax liability of non-residential taxable people in Turkey rental income
Rental income received by the owner, possessor, owner of the usufruct and easement, and leaseholders in Turkey from the lease of the property and rights listed above as commercial property and house are subject to real property tax. The rental income generated by these properties and rights is taxed and is known as Real Property Tax.
What is the rental income?
The income from a lease of properties and rights (land, house, rights, etc.) However, income derived from properties and rights used in a business or agricultural establishment is determined according to the provisions for determining company or farming income.
Non-resident taxpayers, on the other hand, must report business profits earned from running their home as a pension or aparthotel. In this situation, the taxpayer must file an income statement with the tax authorities following the company income provisions.
When do I need to pay the tax on my rental income?
The rental income earned by taxpayers in the current year or previous years, whether in cash or kind, is considered income earned in the current year. For instance, if the rental income from 2004, 2005, and 2006 is obtained in 2007, the payment would be considered 2007.
The rental income of future years earned in advance will be considered the rental income of each related year and recorded in that year. If the rental income for 2007, 2008, and 2009 is earned in 2007, the rental income for each year will be declared in the year in which it occurred.
Foreign currency rental payments
Gross income is measured for foreign currency rental payments using the exchange rate declared by the Central Bank of Turkey on the collection date. If there is no current market price, the currency is converted into New Turkish Liras (YTL) at the rate set by the Ministry of Finance.
In the case of in-kind rental payments, the sums are converted using the Tax Procedure Law’s corresponding value.
The Requirements for nonresident taxable persons in Turkey to declare rental income
Non-resident persons are only liable to a small extent for income earned in Turkey. In this case, taxpayers with only rental income from immovable properties in Turkey must file an immovable property tax return only if their total revenue for the calendar year exceeds the exception amount.
Payment time and where to pay
The income tax is payable in two parts and charged in two installments. The first installment is due in March, followed by the second in July. Taxes may be remitted to tax offices or registered bank branches.
The deductible expenses from rental income
The costs which can be deducted from rental income to assess the net income of real property income can be calculated in two ways:
Expenditure on a one-time basis.
Based on actual spending.
Both immovable assets are subject to the option of lump-sum or actual expenditure basis.
For all immovable objects, only one of the spending bases may be used.
Exception applied to rental income
If a house has many owners, the exemption from rental income taxes is extended separately to each owner as 2.300 Turkish Lira. When rental income comes from several houses, the exception is only applied once to the overall rental income.