An up-to-date guide for the British Companies who considers doing business in Turkey, is prepared by Levene Consulting on "How to do Business in Turkey" by referring to Fiscal requirements, Tax and Legal Environment.
The guide has been prepared for the benefit of those who are intending to enter the Turkish Market or continuing a business in Turkey. We aim to provide a broad overview of the essential things that should be taken into account by all companies before initiating an organisation in Turkey.
Turkish Fiscal and Legal Requirements face frequent amendments (depends on the industry or sector) thus we recommend that anyone considering doing business in Turkey or looking to the area as an opportunity for expansion, should seek professional advice before making any business or investment decision.
Our dynamic team is capable of doing extensive research on ever-changing subjects and lead our clients into the most feasible way of doing business in a new market. Use of Primary or Secondary Research, Project Planning, Applications & Authorisations and B2B consultancy is some of our strengths.
Please do not hesitate to contact with Levene Team if you need any professional advice.
What you will find in the report?
A company whose statutory domicile or place of management is in Turkey (a resident company) is subject to full tax liability, i.e. its worldwide income is taxable. If a non-resident company conducts business through a branch or a joint venture, it has limited tax liability, i.e. it is fully subject to corporate income tax on profits earned in Turkey on an annual basis. If there is no presence in Turkey, withholding tax is generally applied to income earned, for example, in respect of services provided in Turkey. If there is a tax treaty in force, reduced rates of withholding tax may apply.
A foreign organisation who has no residency status and have principal place of business in a different country is called “Limited Taxpayer” in Turkish Commercial Code and subject to taxation only on the profits based in Turkey.
When a company provides services such as SW development or Engineering service (rather than trade based commercial gain), falls into “Gain from Self-Employment” status due to the nature of service provided and can be exempted or benefit from reduced rate of Withholding tax. To prevent any possible confusion, the term self-employed is not equivalent of sole-trader in the European commercial code.
Turkey and UK have signed “Double Taxation Agreement” which allows British companies to do business in Turkey by paying only the taxes through the profits earned in Turkey.