Glossary of Turkish Tax and Accounting Terms

The Istanbul regional chamber under TÜRMOB. Practitioners based in Istanbul are registered here; the minimum fee tariff and regional professional practice notices are published by this chamber.

Turkey’s licensed accountant title, the local equivalent of a CPA. Under Law No. 3568 every company that keeps statutory books must sign a written engagement with an SMMM — this is a legal requirement, not an option. The licence is issued by TÜRMOB.

The umbrella professional body for SMMMs and YMMs. It issues licences, sets ethics and advertising rules, and maintains the official register where a practitioner’s licence can be verified.

The tier above SMMM. A YMM cannot keep books but holds attestation authority — a YMM certification report may be required for VAT refunds, technopark exemptions and similar procedures. Earned after seniority as an SMMM plus an examination.

The social security status of the self-employed, under Art. 4/1-b of Law No. 5510. Company shareholders, sole traders and independent professionals fall here and pay their own premiums. Not to be confused with 4/1-a (former SSK), the status of salaried employees.

Turkey’s tax administration, the counterpart of the IRS. Returns are filed through GİB systems and advance rulings (özelge) are requested from it.

Turkey’s financial crimes investigation unit, the counterpart of FinCEN. It administers anti-money-laundering and counter-terrorist-financing rules. For foreign investors its most visible effect is the identification and ultimate-beneficial-owner duty it imposes on banks when a corporate account is opened.

Turkey’s online trade registry portal. Company formation is initiated through MERSİS and every legal entity receives a unique MERSİS number. Formation documents are generated here and passed to the Trade Registry Directorate.

Turkey’s social security institution. Employee registrations, premium accruals and pension processes run through SGK. An employer must notify SGK before an employee starts work.

Turkey’s central bank. For cross-border flows the decisive text is its Capital Movements Circular: whether an inbound transfer counts as capital, a loan or a service payment is assessed under it.

The Turkish JSC equivalent; minimum capital TRY 250,000. Preferred where investment is expected, shareholder numbers will grow, or shares will change hands often: transfers generally need no notary deed or registration, which eases closing a round and exiting. It brings a board structure and, in some cases, statutory audit.

The Turkish LLC equivalent; minimum capital TRY 50,000. The most common company type in Turkey. It has 1–50 shareholders whose liability is in principle limited to their capital — though for public debts (tax, social security) personal liability can arise in proportion to shareholding. Share transfers require a notary deed and registration.

The simplest structure, with no separate legal personality — legally the same person as its founder. Cheap and quick to set up and taxed under progressive income tax rather than corporate tax. The trade-off is unlimited personal liability: business debts reach the founder’s personal assets.

The official publication where formation, articles amendments, capital increases and signatory changes are announced. In most cases an action becomes effective against third parties only upon this publication; banks and investors check it first in due diligence.

Tax paid quarterly on account of the annual liability. It is deducted from the final tax computed at year-end; any excess is refunded or offset against other liabilities. Not a separate tax but the same tax collected in instalments.

Tax on the profits of capital companies (Law No. 5520); standard rate 25%. The return is filed in the fourth month following the accounting period — end of April for companies on a calendar year.

A distribution from a company’s after-tax profit to its shareholders. Turkey taxes it in two stages: corporate tax at company level, then withholding on distribution. For a foreign shareholder a double-tax treaty may reduce the withholding rate — which requires a certificate of residence.

The distinction that sets the scope of taxation. A full taxpayer (an individual resident in Turkey, or an entity with its legal or business seat there) is taxed on worldwide income; a limited taxpayer only on income sourced in Turkey. For foreign investors this distinction drives the tax outcome of the structure chosen.

The law taxing individuals’ income. It applies a progressive tariff and regulates seven categories of income (commercial, agricultural, professional, employment, immovable property, capital investment, and other gains) separately. The professional-income provisions relevant to freelancers sit here.

Turkey’s value added tax (Law No. 3065); the standard rate is 20%, with reduced rates of 10% and 1% for certain goods and services. Services rendered abroad are exempt under the service-export exemption when its conditions are met.

Costs recorded as expenses in the books but not allowed as deductions from the tax base. It is the main reason commercial profit differs from taxable profit: non-deductible amounts are added back. Part of passenger-car costs, fines and certain donations are typical examples.

Tax arising from the execution of documents such as contracts, undertakings and payrolls (Law No. 488). On most documents it is proportional (per mille of the value). Signatories are jointly liable, which is why corporate contracts state explicitly who bears it.

The procedural law governing how tax is assessed, notified, accrued and collected; which books are kept, how documents are issued and how penalties apply. Practical rules such as record-retention periods and invoicing deadlines come from here.

Tax withheld at source by the payer and remitted to the tax office. Rent, wages, professional-service payments and dividend distributions are subject to it. The amount withheld is in most cases credited against the tax computed in the annual return — it is an advance, not a final tax.

A written opinion obtained from GİB on a taxpayer’s specific situation. A taxpayer who acts in line with the ruling addressed to them is shielded from tax penalties — but a ruling is specific to its applicant and the facts described; someone else’s ruling gives no binding protection.

The electronic invoice issued to recipients not registered in the e-Invoice system (end consumers or unregistered taxpayers). Legally equivalent to an e-Invoice; the difference is that it does not require the counterparty to be in the system and can be delivered by email or link.

An invoice issued and delivered electronically through GİB systems, exchanged only between registered e-Invoice users. Mandatory for taxpayers above certain turnover thresholds or in specified sectors; it replaces the paper invoice.

The document issued by independent professionals (consultants, lawyers, accountants, freelancers) for their services — a receipt, not an invoice. It is issued on a cash basis, when payment is collected. Its electronic form is the e-SMM.

The return reporting tax withheld from rent, wages and professional-service payments. Merged with social security reporting, it is filed as the “Withholding and Premium Service Return”. The filing duty stands where withholding has arisen, even if payment has not been made.

A temporary programme allowing offshore or unrecorded assets to be declared and brought onto the books, granting protection from tax audit and assessment for the declared asset. The protection is bounded by whether the relevant period’s filing deadline had already passed at the moment of declaration — it is not an open-ended amnesty.

An enterprise below the thresholds for headcount and annual net turnover / balance-sheet size. KOSGEB grants, certain tax reliefs and credit programmes depend on this definition; the thresholds are updated by regulation.

The VAT exemption for services supplied to a customer abroad and used abroad. Two conditions apply together: the customer must be abroad and the benefit must arise abroad. Repatriation of the fee in foreign currency is documented. A separate income/corporate tax deduction may also apply to the earnings.

A state-designated technology development zone. Income from software and R&D activity carried out in the zone is exempt from corporate tax, and payroll withholding and employer social-security incentives apply to R&D staff there. The exemption attaches to the activity and the zone — it does not cover all of a company’s income.

The rule that transactions in goods, services and funds between related parties be priced at arm’s length. A price departing from it is treated as a disguised profit distribution and added back to the tax base. Any Turkish subsidiary transacting with its foreign parent falls within scope and incurs documentation duties.