The Republic of Turkey is a secular, predominantly moderate Muslim nation located at the crossroads of Europe and Asia where the Bosphorous Straits connect the Black Sea to the Golden Horn. Turkey, with a proud ancestral heritage that goes back centuries, has now developed into a modern, forward-looking democratic nation.
Turkey shares its borders with Greece, Bulgaria, Azerbidjan, Iran, Syria, Iraq, Armenia and Georgia. The Black Sea, The Aegean Sea and the Mediterranean Sea all touch Turkey's shores. Turkey is larger than many countries in western Europe. It is approximately four hundred miles long from north to south and nearly one thousand miles wide from east to west. The Turkish coastline is approximately eighty-five thousand kilometers in perimeter.
Turkish tax liability for foreign nationals is, in general, determined by residency status. Foreign residents are considered full taxpayers and are taxed upon their worldwide income. Non-residents are viewed as limited taxpayers and are only required to pay taxes on their Turkish source income.
A foreigner is considered a tax resident if he/she resides in Turkey for more than six months per calendar year or if he/she maintains a legal residence in the country. There are no special tax provisions for expatriates. Pensions and social security payments from abroad may be considered taxable income.
The Turkish tax year consists of one calendar year. Income tax is imposed on all taxable income at progressive rates after the benefit of specified deductions and allowances.
Visa, Residency & Immigration Laws
Turkish bureaucracy is a challenge even for those who are accustomed to dealing with it. It is strongly advised that foreign nationals consult a reputable local attorney with a proven background in immigration matters before applying for resident status on their own. It is best to contact a Turkish Consulate prior to arrival in Turkey.
Foreigners who wish to stay in Turkey for more than three months are required to apply for a Residence Permit by filling out a Declaration of Intent form. Residence Permits are issued by the Ministry of Internal Affairs, and are generally valid for a maximum duration of five years. The term may be increased or decreased by the Ministry of Internal Affairs, after consultation with the Ministry of Foreign Affairs. Technically, Residence Permits may only be extended four times. However, with assistance from a well-connected attorney one can generally find exceptions to the rule within the Turkish labyrinth of red tape.
It is far easier to obtain a Residence Permit if one already has a Work Permit. However, individuals cannot apply for a Work Permit. Work Permit applications must be submitted by a company that intends to employ a non-resident foreigner on behalf of that person prior to their arrival in Turkey. The application is made directly to the General Directorate of Foreign Investments and each application is evaluated according to specific criteria where the qualifications of the personnel and the performance of the company are taken into account.
Foreign nationals may purchase real estate in Turkey provided there is mutual reciprocity between the two countries. In other words, if a Turkish national is permitted to purchase property in your country of origin, then you are allowed to purchase property in Turkey.
Foreign nationals were limited to purchasing property within the boundaries of major municipalities prior to 2003. Subsequently the law was amended and foreigners are now permitted to purchase property outside of these areas. However, foreign nationals may NOT purchase property within village boundaries or within designated military zones. Land or farms larger than 74 acres located outside of village boundaries may be foreign-owned, but special permission from the Turkish Government is required.
Property owners (even foreigners) are allowed by law to rent their property to others. When a property is sold, the proceeds can be moved out of the country without penalty after real estate transfer taxes are paid. Property taxes are paid annually, and residential property is re-assessed yearly for tax purposes.
Retiring in Turkey
Foreign residents are generally subject to taxation on their worldwide income, thus foreign State and Private retirement pensions transferred to Turkey may be considered taxable income. Turkey has signed double-tax treaties with some nations. However, due to the complexities of Turkish tax law it is advisable to contact a Turkish attorney for clarification on the tax status of any income you intend to utilize in Turkey.
Companies registered in Turkey must make a lump sum payment to employees who retire. This amount is based upon one month's wages per year of employment with the firm.