Have the income tax brackets changed in Turkey?

The Income Tax General Communiqué published in the Official Gazette on May 24, 2020, introduced no changes in the applicable income tax brackets.

The changes to tax brackets were announced in the New Tax Package at the end of 2019, with a 5% increase.  Until this recent tax package, the taxation system was capped at 35%. However, as of January 1, 2020, a maximum of 40% tax bracket was introduced for employees whose earnings exceed 600,000 TL per annum from a single employer, marking a 5 point increase of the maximum percentage of income tax.

The below tax brackets published end of 2019 are still valid:

1st. Tax Bracket0 – 22,00015%
2nd. Tax Bracket22,000 – 49,00020%
3rd. Tax Bracket49,000 – 180,00027%
4rth. Tax Bracket180,000 – 600,00035%
5th. Tax Bracket600,000 and over40%

Who Needs to Declare Income Tax?

As of January 1, 2020, employees whose wages earned from a single employer exceeded 600,000TL must submit a tax return.

Employees who receive income from more than one employer and whose annual income exceeds 600,000TL (4rth bracket of 2020 income tax tariff) with a second income over 49,000TL (2nd bracket of 2020 income tax tariff), have to declare income tax.

Employees working for more than one employer will have the right to decide which employer is their first employer in terms of tax return.

Examples

Worker A had a wage income of 850,000TL from a single employer in 2020. As worker A earns a wage income in 2020 exceeding 600,000TL, Worker A must declare his income with an annual income tax return. Taxes deducted during the year can be discounted from the income tax calculated on the annual declaration.

In 2020, Worker B earned 580,000TL from the first employer and 30,000TL from the second employer. The total wages of Worker B from both employers is 610,000TL. Since 600,000TL has been exceeded, all wage revenues will be declared. Taxes deducted during the year can be again discounted from the income tax calculated on the annual declaration.

Worker C earned 400,000TL from the first employer and 25,000TL from the second employer. The sum of wages earned totals 425,000TL, a sum under 600,000TL. At the same time, there is no obligation to submit a declaration as the earnings of the employee from the second employer do not exceed 49,000TL, which is the 2nd bracket of the income tax tariff.

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