A Taxation Guide for Small Businesses in Türkiye

What Are the Main Types of Taxes?

Small businesses operating in Türkiye are generally subject to several core types of taxes, including income tax, corporate tax, value-added tax (VAT), withholding tax, and stamp duty. The specific tax obligations a business faces can vary based on factors such as its industry, legal structure, and income level. Because of this, it’s crucial for small business owners to have a clear understanding of their tax responsibilities. Doing so not only ensures compliance with Turkish tax laws, but also supports the financial health and sustainability of the business over time. To help business owners navigate the system more confidently, here’s a quick breakdown of the main types of taxes that may apply:

• Income Tax: This tax applies to the earnings and revenues of natural persons, including sole proprietors and individual entrepreneurs. In Türkiye, income tax is calculated on a progressive scale, meaning the tax rate increases as income rises. The more you earn, the higher the percentage of tax you’ll pay within defined income brackets.
• Corporate Income Tax: It is levied on the profits generated by capital companies (e.g. limited liability or joint stock companies). Unlike income tax, corporate tax may be subject to a flat rate and is paid by legal entities.
• VAT (Value Added Tax): VAT is an indirect tax applied to the sale of goods and services. While it’s ultimately paid by the end consumer, it is the responsibility of businesses to calculate, collect, and report the tax to the government. VAT rates can vary depending on the sector or type of product or service offered. Businesses are typically required to submit regular VAT declarations to remain compliant.
• Withholding Tax (Income Tax Withholding):
• Withholding tax refers to a tax deducted at the source — meaning it's withheld from payments such as rentals, self-employment fees, and wages. The entity or individual making the payment is responsible for deducting the tax amount and remitting it directly to the tax office on behalf of the recipient. This system helps ensure the state collects taxes efficiently and reduces the risk of non-compliance.
• Stamp Tax: It is a type of tax levied on official documents, contracts, lease agreements, and similar documents. It is usually calculated at a certain rate according to the content of the document and is paid on a one-time basis.

The types of taxes a business is required to pay in Türkiye can vary depending on its legal structure — whether it's operated as a sole proprietorship or a capital company (such as a limited liability or joint-stock company). In addition, some sectors may benefit from special tax regulations, exemptions, or incentives designed to support specific industries. To ensure you're meeting your obligations correctly, it's important to identify which tax categories apply to your business. Tools like a comprehensive taxation guide or an online tax return calculator can be valuable resources for helping you understand your responsibilities and file accurate declarations with confidence.

When Do You Become a Taxpayer?

A business becomes a taxpayer as soon as it begins operations, but this is contingent upon the official registration of the business activities. Typically, you'll determine if you need to register as a taxpayer during the process of company incorporation or when you begin working as a self-employed individual. Depending on the scale of your business operations, tools like a small business tax calculator can help you estimate your annual tax liability and gain a clearer picture of your tax obligations.

The following situations can make you a taxpayer:

• Application to obtain a tax plate
• Registration in the trade registry
• Start issuing official invoices
• Exceeding a certain turnover limit

It is recommended that you seek expert support to understand your small business tax obligations during these processes.

How to File a Tax Return in Türkiye?

In Türkiye, tax declarations are typically submitted through the digital systems of the Revenue Administration. The filing periods may vary depending on the type of income and the nature of the business. Tax returns can be filed electronically, but it’s important to be accurate, as mistakes in the process can lead to significant penalties. To ensure the correct amounts are declared, you can use a tax return calculator to review your figures before submission. For this process, you’ll need to log in to the e-declaration system and prepare the required documentation.

Taxation for Freelancers and Self-employed People

Freelancers and self-employed individuals are also classified as taxpayers in Türkiye. For these individuals, income tax is typically applicable, and all business transactions must be properly documented with invoices. Additionally, it may be necessary to maintain a self-employment income book, ensure that taxes are paid regularly, and declare VAT where applicable, depending on the nature of the services provided. To better understand your tax responsibilities, including which expenses are tax-deductible, freelancers can refer to specialized taxation guides tailored to self-employed professionals. Furthermore, using a tax calculator can help you estimate your tax liability and ensure you’re staying compliant with Turkish tax laws.

Is E-Invoicing Mandatory for Your Business?

In Türkiye, electronic invoicing (e-Invoice) may be mandatory for certain businesses, with the requirement typically based on annual turnover. Companies whose annual revenue exceeds a specified threshold may be required to transition to e-invoicing in order to comply with tax regulations.

When evaluating whether your company needs to transition to e-Invoice, you can look at the following:

• Companies with annual turnover over 500,000₺
• Those operating in specific sectors (fuel, automotive, etc.)
• E-commerce companies

For small businesses, the requirement to adopt e-invoicing may vary depending on the sector and the scale of operations. To determine whether your business falls under this obligation, it's advisable to consult with a small business tax advisor or review the latest legislation. The transition to the e-Invoice system is also a key part of digitalization efforts, aiming to reduce informality and improve the overall transparency of business transactions.

What types of taxes are small businesses required to pay in Türkiye?

The types of taxes that small businesses in Türkiye are required to pay can vary based on the nature of their business activities. For sole proprietorships, taxes such as income tax, VAT, and withholding tax are typically the most relevant. On the other hand, limited liability and joint-stock companies may face different tax obligations, including corporate tax. Additionally, certain business activities may be subject to special taxes based on their industry or operations. To understand which taxes apply to your business, you can refer to a taxation guide. For a more accurate estimate of your potential tax liabilities, using a small business tax calculator can help you plan ahead.

Do I need to hire a certified accountant to manage my taxes in Türkiye?

Tax processes in Türkiye can be quite complex, making it highly beneficial for many small businesses to work with a certified public accountant (CPA). Handling tasks such as tax return preparation, VAT calculations, and Social Güvenlik Kurumu (SGK) declarations requires specialized knowledge and expertise. By partnering with a professional, you can reduce the risk of errors and ensure that all filings are completed accurately and on time. Having an accountant guide you through these processes not only helps you navigate the tax system with confidence, but it also enables you to make more informed decisions. Additionally, using a tax calculator in collaboration with your accountant can aid in tax planning, ensuring more accurate estimations of your financial obligations.