GenelGelir Vergisi

Rental Incomes For Non-Resident Taxpayers

According to the Income Tax Law No. 193, incomes of real persons are subject to the income tax. Income items subject to the income tax are business incomes, agricultural incomes, salaries / wages, incomes from independent personal services, incomes from immovable property and rights (rental incomes), incomes from capital investment and other income and gains.

Non-resident taxpayers are real persons who are not settled in Turkey in other words who do not have their residences in Turkey and who do not reside in Turkey for a continuous period of more than six months within one calendar year. Non- resident taxpayers shall be taxed only on income and gains which they have obtained in Turkey, they do not file a tax return in Turkey for income and gains which they have obtained in foreign countries.

On the other hand, Turkish nationals who live abroad with a residence or work permit are also considered within the scope of the non-resident taxpayer. According to explanations made in the Communique Serial No. 210 of the Income Tax Law, Turkish nationals who live abroad for more than six months with a residence or work permit shall be taxed on the basis of limited liability in terms of income and gains which they have obtained in Turkey, except for Turkish nationals residing in foreign countries due to their works affiliated with private enterprises whose headquarters are located in Turkey or public institutions.

This guide has been prepared to present explanations and samples about the property and rights which are subject to the rental income, amount of exception for rentral income from house, limit for declaration in workplace rental income, equivalent rental value implementation, expenses which shall be deducted from declared rental income, tax withholding in rental payments, taxation of rental income in terms of Double Tax Prevention Agreements, time and form of rental income declaration, tax schedule, calculation of income tax payable, payment ways, and how to file a tax return on the Pre-filled Tax Return System for the taxation of those who lease their property and rights in 2020.

  1. RENTAL INCOME

Incomes obtained from leasing of the property and rights which are stated in the Income Tax Law No. 193 is defined as “income from immovable property and rights” and are subject to the income tax in certain conditions.

The liable persons of immovable property’s income are the owners, tenants (persons having the rights to use actually), possessors, servitudes and usufruct right owners of the property and their tenants in the event of leasing of a rented property and rights.

  1. PROPERTY AND RIGHTS WHICH ARE SUBJECT TO RENTAL INCOME

Property and rights which are subject to the rental income are defined in Article 70 of the Income Tax Law. They are mentioned as;

  • Land, building, mineral water and underground water sources, mines, stone pits, production places of sand and gravel, brick and tile fields, saltworks and their component parts,
  • Large fishing net fields and fishponds,
  • Component parts of immovable properties leased separately and all their installations, inventory stock and flooring,
  • Rights registered as immovable property,
  • Searching, operating and franchise rights and their licenses, patent right, trademark, commerce title, any kind of technical drawing, design, model, plan and cinema and television films, audiotapes and videotapes, a secret formula belonging to an experience acquired in industry, commerce and science or rights as right of usage or privilege of usage on a production method,
  • Copyrights,
  • Ships and shares of ship and all the motorized shipment and unloading vehicles,
  • Motorized transfer and draw-frame vehicles, any kind of motorized vehicle, machine and installation and their appurtenance.
  1. OBTAINING OF RENTAL INCOME

Obtaining of rental income is bound to collection principle. In order to tax the rental income in accordance with the collection principle, it should be collected in cash or in kind.

  • Collection of Rental Income in Cash

Collection of rental income in cash states that the payment of rent in Turkish Liras or in foreign currency. Received cheques are also taken into account as collection in cash.

  • Rental income collected by the taxpayers relating to that year or previous years is taken into account as the income of the year which it is collected in.

Example, if 2017, 2018 and 2019 rental incomes are collected in 2020, these incomes will be taken into account as the income of the year 2020.

  • Rental income relating to prospective years which is c ollected in advance is not taken into account as the income of the year which it is collected in but as the income of the years which the income is related to.

Example, if 2020, 2021 and 2022 rental incomes are collected in 2020, each year’s rental incomes will be taken into account as the income of the related year.

In terms of foreign currency, rental payment and gross revenue is calculated according to the exchange rate announced by The Central Bank of Republic of Turkey on collection date.

  • Collection of Rental Income in-kind

If the rental payment is collected in-kind (property, ware etc.), payments are valued according to the Tax Procedure Law No. 213.

3.3. Collection and Payment of Leasing by Means of Banks or Postal Administration

Those who obtain a rental income and their tenants;

  • For residence, 500 TL or over per month for each house; in case of weekly, daily or similar short-term housing rental regardless of the amount
  • For workplace, without a limitation of amount

must make the payments and collection of the leasing by means of banks, financial institutions or postal administrations and are obliged to authenticate their payments and collections through documents issued by these institutions.

Regulations on the subject are included in the Communiqué Serial No. 268 and 298 (the Communiqué related to making amendments on the Communiqué Serial No. 268) of the Income Tax Law.

Since receipt or monthly statement is issued for the payment and collection while using mediums like depositing money, money order, cheque or credit cart by means of banks, financial institutions or postal administrations, these documents shall be accepted as certifying documents. Payment and collection carried out via internet banking are also evaluated in the same scope.

The fine which shall be applied to persons who do not comply with the aforesaid obligations is 5% of each transaction’s amount and it should be no lower than the amount of special irregularity fine determined for that year in accordance with the repeating Article 355 of the Tax Procedure Law.

  1. LOW OR NO VALUE FOR RENTAL INCOME

“The equivalent rental value” is taken as bases in case of low or no value for rental income. According to this basis, equivalent rental income principle shall be applied on the conditions of;

  • leaving the immovable property to the usage of other persons for free,
  • lower value of rental income of rented immovable property than the equivalent rental value.

The equivalent rental value in rented buildings and lands is the rental value determined by authorized specific authorities or courts, if it is available.If there is no renting determination or judgment for the aforementioned building or land, equivalent rental value is 5% of its real estate tax value.

The equivalent rental value in property and rights for other than buildings or lands is 10% of their cost price. If this cost is not known, it is 10% of determined values of them calculated in accordance with valuation of property provisions of Tax Procedure Law.

Example: Taxpayer (A) gave up a flat valued 600.000 TL to one of his/her friends without charge in 2020.

In this case, taxpayer (A) need to calculate his/her rental income on the equivalent rental value.

Equivalent rental value: 600.000 x 5% = 30.000 TL. This amount should be considered as income to be declared.

The equivalent rental value principle is not applied under the following conditions:

  • Leaving empty immovable properties to other person’s residence in order to protect the immovable,
  • Allocating the buildings to the residence of the property owner’s children, mother and father or siblings (But, if more than one house allocated to the residences of each of these persons, equivalent rental value is not calculated only for one of these houses.

Example, if owner of property has allocated two houses to the residence of his/her child, it will not be calculated equivalent rental value for one house and for the second one it will be calculated.)

  • Accommodating of relatives with the property owner in the same house or flat, Leasing done by General Budget and by Annex Budget Offices, by provincial administrations and municipalities and by other public i nstitutions and organizations.
  1. EXCEPTION FOR RENTAL INCOME FROM HOUSE

The amount of 6.600 TL for rental income from house for the year 2020 (the exception amount of 7.000 TL for the year 2021) is exempted from income tax. If persons, who gain rental income from house, obtain income less than the amount of exception that is established annually (the exception amount of 6.600 TL for the year 2020) are not required to file a tax return.

Example: Taxpayer (B) rented his/her house from 500 TL per month and obtained 6.000 TL annually in 2020. In this case, since the rental income from house is less than the exemption amount of 6.600 TL, it will not be declared by the taxpayer.

In the case the rental income is not declared between the dates in time or the rental income is understated, it will not be able to benefit from the exception amount of 6.600 TL for the year 2020. However, those who submit returns, before any determination is made by the administration, on their own accord for their rental income which they did not declare or include in their returns on time, will benefit from the related exception.

If the rental income from house exceeds the amount determined for exception, the amount of exception should be deducted from rental income to be declared in the annual tax return. If there is a rental income obtained and declared at the same time both from house and workplace, the exception applies only to the rental income obtained from house, not to the rental income from workplace.

Those who have to declare their income from business, agriculture or professional activities and regardless of whether a declaration is required or not, those who gain a rental income above 6.600 TL, of whose gross total of their income including wage, income from capital investment, rental income, other income and gains exceeding the amount of 180.000 TL for the year 2020 jointly or severally, cannot benefit from the exception for rental income from house .

In case more than one person has the ownership of a house, the taxation of the rental income obtained from such house will be subject to 6.600 TL (for the year 2020) of exception separately for each proprietor.

Thus, if the inheritance is not shared, every inheritor will benefit from the exception separately.

  1. EXPENSES TO BE DEDUCTED WHEN DETERMINING RENTAL INCOME

In the taxation of rental income, the net amount of the income obtained is determined in two different ways as follows:

  • Actual expenses method,
  • Lump-sum expenses method (for other than those who lease rights).

The selection of the actual expenses or lump-sum method should cover all immovable property, which means that it is not possible to choose the actual expenses method for some part and the lump-sum expenses method for the remaining part.

Taxpayers opting for the lump-sum expenses method cannot return to the actual expenses method unless two years have passed.

6.1. Deduction of Expenses in Actual Expenses Method

If the actual expenses method is chosen, following actual expenses can be deducted from the gross amount of rental income:

  • Lighting, heating, water and elevator expenses paid by lessor for rented property,
  • Management costs which are measured according to the importance of property and related with the administration of the rented property,
  • Insurance expenses relating to the rented property and rights,
  • Interest of debts relating to the rented property and rights,
  • 5% of acquisition value of one rented house for 5 years beginning from the date of acquisition (This deduction applies only to rental income of the rented house; non- deductible part is not evaluated as expenditure surplus. This deduction is not valid for houses acquired before 2016),
  • Taxes, duties and fees paid for the rented property and rights and rates paid to municipalities for expenses by lessor,

It is not allowed for taxpayers not residing in Turkey, (including Turkish nationals who reside abroad for a continuous period of more than six months with a residence or work permit) to deduct the amount of rents they pay in a foreign country from their rental income obtained in Turkey

  • Cost of loss, detriments and compensations paid for rented property and rights based on a contract, law or court decree.

6.1.1. Calculation of Deductible Expenses in Case of Exception in Actual Expenses Method

In cases where, a taxpayer chooses the actual expenses method and benefits from the exception applied to rental income from house, the amount of actual expenses corresponding to exception is not deductible from gross revenue.

The deductible expenses part corresponding to the taxable revenue can be calculated using the following formula:

Total Expenses x Taxable Revenue[1]

Deductible expenses = ————————————————————

Total Revenue

(*) Taxable Revenue = Total Revenue – Amount of Exception for Rental Income from House

Example: Taxpayer (C) rented his/her house in 2020 and obtained 60.000 TL of rental income. Taxpayer, who has no any other income, incurred 15.000 TL of expenditure for his/her property and chooses the actual expenses method.

The amount that taxpayer can deduct as actual expenses will be the amount that corresponds to the taxable revenue of the total expense for 15.000 TL.

Taxable revenue = 60.000 – 6.600 = 53.400 TL Deductible expense = (15.000 x 53.400) / 60.000 = 13.350 TL

In this case, the amount of actual expense to be deducted from the rental income is 13.350 TL.

6.2. Deduction of Expenses in Lump-sum Expenses Method

Taxpayers opting for the lump-sum expenses method can deduct the lump-sum expense at the rate of 15 % on the remaining amount after deducting the amount of exception from their rental incomes against actual expenses.

It is not possible to opt for lump-sum expenses method in the case of leasing rights. For instance, taxpayers, who gain office rental income and income from leasing rights, should choose actual expenses method since they should declare rental income from leasing rights at their tax return.

  1. IN THE EVENT OF LOSS

Any decrease occurring in the capital itself which is subject to income from immovable property is not considered as loss and is not accepted as expense when determining the gross income amount.

Losses arising from the expenditure surplus in the calculation of the net amount of income from immovable property can be deducted from income to be declared in the following years not for more than 5 years.

There are two exceptions for this rule:

  • In the event of any loss resulting from deducting the amount of the rent of the house or lodging paid by the lessor from the rental income of their house, such loss cannot be subject to deduction from the income from immovable property to be obtained in the following years.
  • Non-deductible part of the amount corresponding to 5% of the acquisition value which has been subject to deduction of income from the immovable rented as house is not considered as an expenditure surplus.

Accordingly, it is not possible to consider an expenditure surplus as loss in these situation.

  1. TAX WITHHOLDING IN RENTAL PAYMENTS

Persons, corporations and entities who rented property and rights in accordance with Article 94 of Income Tax Law are obliged to withhold income tax on the gross amount of payments made for

Persons, corporations and entities in question that are tenants have to withhold income tax from the gross amount of their rental payments at the rate of 20%. According to President of the Republic Decision No. 2813 published in the Official Gazette No. 31202 and dated July 31st, 2020;

The withholding rate applied in accordance with the Income Tax Law on rental payments made in cash or account between the dates of July, 31st 2020 – December, 31st 2020 has been determined as 10 %. (According to President of the Republic Decision No. 3319 and dated October, 22nd 2020, the withholding implementation which is 10% has been extended until May, 31st 2021.)

This withholding tax will also be made from the rent paid in advance for the upcoming months and years.

In case that the immovable property leased out is used both as house and workplace; the total rent is subject to withholding as long as it is used as workplace partially or in whole.

  1. DECLARATION OF RENTAL INCOME

Non-resident taxpayers do not submit annual returns for their incomes from immovable property which are taxed wholly by withholding in Turkey Also, in case that they submit annual return for other income, they do not include the income which is subject to withholding tax in their returns.

Taxpayers who have only rental income from immovable property in Turkey will submit annual tax return, if;

  • their rental income from house exceeds tax exception amount (6.600 TL for the year 2020); and,
  • their rental income not subject to withholding obtain from leasing of the properties and rights within a calendar year

On the other hand, rental income which is subject to withholding will not be declared the annual tax return regardless the amount.

Every member of a family has to submit a return on their own behalf for the rental income they obtained from the property and rights belonging to them.

On the occasion that minor and restricted persons are taxpayers; the annual return to be submitted on behalf of them is signed by their parents, guardians or curators.

In case of having property and rights with shares, every partner should declare the rental income corresponding to his/her own shares.

  1. DEDUCTIONS TO BE MADE FROM INCOME INCLUDED IN THE ANNUAL TAXDECLA RATION

Deductions with respect to income to be declared by an annual tax return are specified in Income Tax Law and in other relevant laws. In order to make the following deductions from the income to be declared in income tax return while income tax base is being determined, there must be an income to be declared in an annual tax return and deductions to be made should satisfy the requirements specified in the relevant legislation.

The revenue that is declared at the annual tax return before the other deductions and the revenue loss of former years are deducted would be taken as the base revenue to calculate the amount that would be deducted.

Accordingly, here are some of the matter that may be made subject to the discount:

  • Life I Individual Insurance Premiums

The 15% of life / individual insurance premiums paid, can be deducted for determining the tax base in the annual tax returns.

The premiums that should be taken into account for determining the tax base are as follows:

  • 50% of life insurance payments of the taxpayers’, their spouses and children,
  • 100% of death, accident, health, disability, maternity, child birth and education individual insurance premiums.

The total amount that would be deducted cannot exceed the 15% of total revenue and annual amount of minimum wage. (The gross annual minimum wage for 2020 is 35.316,00 TL).

The premiums paid to the individual retirement insurance cannot be deducted.

  • Education and Health Care Expenses

The education and health care expenses done as stated below would be deducted from the annual revenue declared in tax return in condition not to exceed the 10% of total revenue:

  • The education and health care expenses should be done in Turkey.
  • The expenses should be verified by the documents taken from the individual or legal personalities who are personal or corporate income taxpayers.
  • The expenses should be regarding the taxpayers’ oneself or their spouse and small children.
  • The term” small child” refers to children under the age of 18 or under the age of 25 in the education who live with a taxpayer or who are cared for by a taxpayer (including those who are given alimony, those who have been adopted and those who live with a taxpayer from grandchildren who have lost their parents).

10.3. Donations and Aids

  • Donations and Aids Which Can Be Deducted As Limited To 5 % of income To Be Declared

Personal income taxpayers, general and private budgeted public administrations, provincial administrations, municipalities, villages and non-profit associations and the foundations that are exempted from tax by President of the Republic, can deduct the donations and aids against receipt from their annual income in condition that it would not exceed the 5% of total income. (It would not exceed 10% of total income if donations are made to the stated organizations, associations and foundations in the development priority zone).

  • Donations and Aids Which Are Completely Deductible
  1. a) The donated schools, health institutions, the student dormitories and day care centers which have bed capacity not less than 100 (in development priority zones not less than 50), orphanages, rest houses, care and rehabilitation centers to the general and private budgeted public administrations, provincial administrations, municipalities, villages and all expenses for the construction of the place of worship constructed by the permission of authorized public administrati ve director,the institutions where there ligious education is given under inspection of the Directorate of Religious Affairs, youth centers and youth and scouting camps belong to the Ministry of Youth and Sports or all donations and aids in kind or in cash made for the construction or for the maintenance of their activities of these establishments can be deducted.The total cost of food, cleaning supplies, clothing and heating donated to the foundations and associations established as food banks for helping poor people in line with the procedures an principles determined by the Ministry of Treasury and Finance can be deducted.
    1. General and private budgeted public administrations, provincial administrations, municipalities, villages, non-profit associations, the foundations that are exempted from tax by President of the Republic, the expenses done by institutions which makes scientific research or the expenses for the studies that are supported by the Ministry of Culture and Tourism and all donations and aids made for these purposes can be deducted.
    2. The total amount of the donations and aids in kind or in cash against receipt to the aid campaigns initiated by President of the Republic.
    3. The total amount of the donations and aids in cash against receipt to Turkish Association of Crescent and Turkish Green Crescent Society except their commercial enterprises can be deducted.
  • Sponsorship Expenses

According to Article 89/8 of the Income Tax Law the sponsorship expenses done can be deducted

from the income declared at annual tax return as follows:

  • 100% of expenses for amateur sports,
  • 50% of expenses for professional sports.
  • Donations and Aids Which Are Completely Deductible in Accordance with Other Laws

Donations and aids which are completely deductible in accordance with other laws are as follows:

  • Law No. 222 on the Primary Education and Training,
  • Law No. 278 on the Establishment of Turkish Scientific and Technical Research Institution,
  • Law No.2457 on the Higher Education,
  • Law No. 2828 on the Social Services,
  • Law No. 2876 on the Atatürk High Institution of Culture, Language and History,
  • Law No. 3294 on the Improvement of Social Aid and Solidarity,
  • Law No. 3713 on the Anti-Terrorism,
  • Law No. 4122 on the National Afforestation and Erosion Control Mobilization,
  • Law No. 7174 on the Cappadocia Area (including sponsorship expenses),
  • Law No. 7269 on the Assistance To Be Made By Precautions To Be Taken Due To Disasters Affecting Public Life.

In case the donations and aids are not in cash, the equal value of the donated p roperty or the right; if the equaltaken into account.

  1. TIME AND FORM OF RENTAL INCOME DECLARATION

For the period January 1st, 2020 – December 31st, 2020; non-resident taxpayers need to submit returns concerning their income from immovable properties between the dates of March 01st-31st, 2021.

  • It is possible to file tax returns via the Pre-filled Tax Return System on the internet.
  • If non-resident taxpayers have tax representatives in Turkey, they will submit their returns to the authorized tax office of their tax representatives’ location and if they do not have tax representatives in Turkey, they will submit their returns to the authorized tax office of immovable property location.
  • In accordance with the Law No. 3568, returns can also be submitted on the e-Return system by members of profession who have received the mediation authority to submit an electronic return by signing an electronic return mediation agreement with them.In the Pre-filled Tax Return System, returns will be deemed electronically approved. If the return is sent through normal postal T.
  1. PRE-FILLED TAX RETURN SYSTEM

Taxpayers whose incomes subject to the declaration composed of only income from immovable property and rights (rental income), wage, income from capital investment, other income and gains or several of them can submit their returns regarding these incomes, which the Turkish Revenue Administration has prepared previously and has submitted for the approval of taxpayers, via the Pre-filled Tax Return System which is an easy- to- use and a fast system.

Taxpayers who only obtain rental income, wage, income from capital investment and other income and gains jointly and severally will be able to benefit from the System.

You can access the System and the detailed information on the official webpage (www.gib.gov.tr) of the Turkish Revenue Administration.

It is possible to log in to the Pre-filled Tax Return System by means of;

Also, you can log in to the System 24/7.

Non-resident taxpayers who do not have the Turkish identification number, registration in MERNIS or do not have rental income liability record at tax offices, they will submit their returns to the authorized tax office of their tax representatives’ location if they have tax representatives in Turkey; if they do not have tax representatives in Turkey, they will use the system after being registered to the authorized tax office where the immovable property is located.

Accordingly, in case there is not any liability record at tax offices and when rental income tax returns prepared on the System are approved electronically, the tax liability registration in the name of taxpayer at tax office and tax accrual transactions are made automatically Then payments for this rental income tax return can be made through contracted banks or all tax offices. Also, it can be paid via online banking or bank/credit cards of contracted banks.

  1. TAX SCHEDULE

The following tax schedule is to be applied for the return to be submitted in March 2021 with regard to rental incomes gained in 2020.

Up to me amount of 22.0D0 TL %15
3.300 TL for 22.000′ TL of 49.000 TL. over %2D
8.700 TL for 49.000 T L of 120.000 TL (for wage incomes 8.700 TL tor 49.000 TL of 13D.OOQ TL), over %27
27.370 TL for 120.000 TL of 600.000 TL, (for wage in comes 44.070 TL for 180.000 TL of 6QD.0D0 TL), over %35
195.870 TL for 600.000 TL of a mount ex ceeding 60 D.O DO TL {for wage incomes 191.070 TL for 60 0.000 TL of amount ex ceeding 600.000 TL j, over %40
  1. TIME AND FORM OF TAX PAYMENT

The income tax calculated on the return shall be paid in two equal installments in March and July of 2021.

  • The first installment must be paid with the stamp tax until March 31st, 2021.
  • The second installment must be paid until August 2nd, 2021. (As the date o July 31st coincides with public holiday.)
  • 15. RENTAL INCOMES FROM IMMOVABLE PROPERTY IN TERMS OF DOUBLE TAXATION AGREEMENTS

Rental income from immovable property is mentioned in Article 6, titled “Income from Immovable Property” and Article 12, titled “Royalties” of Double Taxation Agreements that Turkey concluded.

Article 6 of the Agreements mainly deals with income from leasing of immovable properties and related rights, and provides that the State where the immovable property is situated has the right of taxation. Accordingly, taxation of the rental income from the immovable property situated in Turkey of individuals resident in the other State will be in accordance with the procedure and principles of domestic legislation of Turkey and in these Double Taxation Agreements there is not any provision limiting the domestic legislation.

Example, Taxpayer (D) who is living in Germany will be taxed in accordance with the domestic legislation of Turkey in case he rents his/her property in Bodrum.

Turkey has a limited right of taxation from the rental income of nonresident taxpayers obtained by leasing royalties defined in Article 12 of Double Taxation Agreements.

Rate of withholding to be made on the mentioned income may vary from state to state in the Agreements. If the rate specified in Article 12 of the Agreement and the rate defined in our domestic legislation differs, the calculation should be made according to the lower rate.

Example, Taxpayer (E) who is a music producer and living in Netherlands had given the copyright of taken over the music album to a music production company in Turkey. The payments of copyright fees that would be done Taxpayer (E) by the music production company are subject to 10% withholding tax according to the Article 12 of Double Taxation Agreement between Turkey and Netherlands.

As the example above, the payments that would be bought from someone else by the comic paper to Taxpayer (F) who is a caricaturist and living in Netherlands, are subject to 10% withholding tax according to the Article 12 of Double Taxation Agreement between Turkey and Netherlands, in case he gives the usage right of the cartoons he bought to the comic paper in Turkey.

However, in order to be taxed in line with Article 12 of Double Taxation Agreement, residents (full taxpayers) of other country who derive income or profit from Turkey, should submit certificate of residence received from competent authorities of their own resident country along with the translated copy of it into Turkish language which shall be approved by a notary public or Turkish Consulates in that country, to the related tax office or the tax withholders in case withholding tax is required. Tax withholders are required to keep the certificates of residence to submit to the competent authorities on demand.

In case of failure of submitting the certificate of residence, domestic laws shall be applied instead of the Articles of the Agreement.

The taxes that would be paid by Turkish citizens, who are living in foreign countries related with the incomes they earned in Turkey, would be deducted or exempted at the countries they are living in accordance with the Double Taxation Agreement with that country.

  1. EXAMPLES RELATED TO RENTAL INCOME DECLARATION

Example 1: Taxpayer (A), living in Germany, leased out his/her flat in Ankara and obtained 20.000 € as rental income in 2020. She/he preferred the lump-sum expenses method and she/he has no other income to declare in Turkey.

On the date of collection, buying rate for Euro announced by The Central Bank of Republic of Turkey is assumed as 7,75 TL.

Income tax for rental income of taxpayer is calculated as follows:

Total Gross Revenue (20.000 € x 7r75 TL) 155.000 TL
Amount of Exception 6.600 TL
Balance (155.000 TL-6.600 TL} 14S.400 TL
Lump-sum Expenses (148.400 TL x 15%) 22.260 TL
Taxable Encorne (148.400 TL- 22.260 TL} 126.140 TL
Amount of Income Tax Calculated 30.190 TL
Amount of Income Tax Payable 30.190 TL
Siamp duty 97,20 TL

Example 2: Taxpayer (B), living in Poland, leased out his/her flat in Antalya and obtained 20.000 Dollars as rental income in 2020. She/he preferred the actual expenses method and she/ he has no other income to declare in Turkey. His/her total actual expense for this house is 6.000 Dollars.

On the date of collection and expenditure, buying rate for Dollar announced by The Central Bank of Republic of Turkey is assumed as 6,50 TL.

Total Revenue = 20.000 $ x 6, 50 TL = 130.000 TL Total Expenses = 6.000 $ x 6, 50 TL = 39.000 TL

Taxpayers who have chosen the actual expenses method will not deduct the expense corresponding to the amount subject to exception from their income, but only the expense corresponding to the amount subject to taxation. Thus, first the total expenses corresponding to the total taxable revenue should be determined. Deductible expenses corresponding to the taxable revenue is calculated as follows:

Total Expenses x Taxable Revenue*

Deductible expenses = ————————————————————-

Total Revenue

*Taxable Revenue = Total Revenue – Amount of Exception for Rental Income from House

= 130.000-6.600 = 123.400 TL

                                                        39.000 x 123.400

Amount of exception corresponding to taxable revenue = ————————————————————————————————— = 37.020 TL

Amount of deductible actual expenses)                                                              130 000

Income tax for rental income of taxpayer is calculated as follows:

Total Gross Revenue (20.000 $ x 6,50 TL) 130.000 TL
Amount of Exception 0.600 TL
Balance (130.000 TL – 6.600 TL) 123.400 TL
Amount of Deductible Actual Expenses 37.020 TL
Taxable Income (123.400 TL – 37.020 TL) 86.380 TL
Amount of Income Tax Calculated 18.792,60 TL
Amount of Income Tax Payable 18 792,60 TL
Stamp duty 97,20 TL

Example 3: Taxpayer (C) who does not reside in Turkey and lives in France leased out his/her office in Bodrum and obtained 15.000 € as rental income 2020. It has been withheld 17.000 TL from rental income.

On the date of collection and expenditure, buying rate for Euro announced by The Central Bank of Republic of Turkey is assumed as 7,75 TL.

Total Revenue from workplace (gross) = 15.000 € x 7.75 TL = 116.250 TL

The annual tax return will not be declared regardless of the amount for workplace rental incomes which are taxed wholly by withholding in Turkey.

Example 4: Taxpayer (D), living in Rome, leased out his/her flat in Ankara and obtained 10.000 € as rental income in 2020. Also she/he leased out his/her office in Ankara and obtained 12.000 € as rental income in 2020. It has been withheld 14.000 TLfrom rental income of workplace. She/he has no other income to declare in Turkey and preferred the lump-sum expenses method.

On the date of collection and expenditure, buying rate for Euro announced by The Central Bank of Republic of Turkey is assumed as 7,75 TL.

Total Revenue from workplace (gross) = 12.000 € x 7, 75 TL = 93.000 TL

The workplace rental income which is taxed by withholding will not be declared regardless of the amount.

Income tax for rental income from his/her flat exceeding the exempted amount is calculated as follows:

Total Gross Revenue (10.000 € x 7n75 TL) 77.500 TL
Amount of Exception 6.600 TL
Balance {77.500 TL – 6.GÜ0 TL ) 70.900 TL
Lump-sum Expenses (70.900 TLx 15%) 10.635 TL
Taxable Income (70.900 TL – 10.635 TL ) 60.265 TL
Amount of Income Tax CalcuEated 11.741,55 TL
Amount of Income Tax Payable 11.741,55TL
Stamp duty 97,20 TL

Example 5: Taxpayer (E), living in Madrid, leased out his/her office in Malatya in 2020 to a taxpayer whose income subject to the simple earning basis and obtained 12.000 TL as rental income annually.

The total workplace rental incomes, which are derived from taxpayers in the simple earning basis and which are not subject to the tax deduction and the exemption implementation, will be declared.

She/he preferred the lump-sum expenses method and income tax for rental income is calculated as follows:

Rental income irom Workplace 12X100 TL
Lump-sum Expenses (12.000 TLx 15%} 1.800 TL
Taxable Income (12.000 TL – 1.800 TL J 10 200 TL
Amount of income Tax Calculated 1.530 TL
Amount of income Tax Payable 1 53ÜTL
Stamp duty 97,20 TL

[1] Depreciation setting aside for rented property and rights, and heat insulation and energy saving expenditures which are made by the lessor and that increase the economic value of the real estate. (These expenditures can be considered as cost if it exceeds 1.400 TL for the year 2020.)

  • Repair and maintenance expenses incurred by lessor for the rented property,
  • Rents and other actual expenses paid by sub-lessors,
  • Rent of the house accommodated by the lessors who rent their own property, (non- deductible part is not evaluated as expenditure surplus),

Please look at original source : https://gib.gov.tr/yardim-ve-kaynaklar/yayinlar

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