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October 25, 2019
Turkey issues draft Bill to amend various tax laws
On 24 October 2019, the Turkish Government submitted a draft bill to the Turkish Parliament. The new bill introduces new taxes namely, the digital services tax, luxury housing tax and hospitality tax. It also covers changes in income tax rates for individuals’ income. This Alert provides a brief summary of the changes to be introduced by the new draft bill.
Introduction of new taxes
Changes in Banking and Insurance Transaction Tax (BITT) applied on money transactions
The BITT rate applied on money transactions is increased to 0.2% from 0.1%.
Increase in withholding tax rates on wages of 1st league Athletes
Athletes that perform activities in 1st league will be subject to a 20% withholding tax on the wages paid to them and if their income bracket falls under the 4th group, they will be required to file an income return.
Changes in income tax rates for individuals
The draft bill proposes a new bracket and tax rate into the income tax rate tariff as follows:
Changes in exempted self-employment income
If self-employed taxpayers whose exempted income defined under article 18 of the Income Tax Code No. 193 exceeds the 4th income tax bracket, they will no longer be subject to this exemption. These taxpayers will have to file a tax return not only for the parts exceeding the 4th bracket but also for all income previously under exemption.
1. See EY Global Tax Alert, Turkey introduces digital service tax, dated 25 October 2019.
For additional information with respect to this Alert, please contact the following:
Kuzey Yeminli Mali Müsavirlik ve Bagimsiz Denetim A.S. Istanbul