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Turkey: New Individual Income Tax Rates, Blacklist of Taxpayers with Large Amounts of Unpaid Taxes

(Jan. 26, 2015) Turkey’s Ministry of Finance published new rates for individual income tax on December 30, 2014, in the country’s official gazette. The amounts and rates are as follows:

Taxable income (in TRL)/Tax on lower amount/Rate on excess over the minimum income in each category:

Up to 12,000 (about US$5,120)/ 0/15%;

From 12,000 – 29,000 (about US45,120 – $12,372)/1,800 (about US4768)/20%;

From 29,000 – 106,000 (about US$12,372 – $45,223)/5,200 (about US$2,219)/27%;

Over 106,000/25,990 (about US$11,088)/35%.
(Emrah Ferhatoglu, Turkey: Individual Income Tax Tables Updated, TAX NEWS SERVICE (Jan. 7, 2015), International Bureau of Fiscal Documentation (IBFD) online subscription database.)

For income other than employment income, the tax and tax rates are the same as those for employment income for incomes up to TRL29,000, but the tax is TRL5,200 for non-employment income between TRL29,000 and TRL66,000, with a tax rate on the portion over TRL29,000 of 27%, and TRL15,190 (about US$6,481) on income over TRL66,000 (about US$28,158), with a 35% rate levied on the amount above TRL66,000. (Id.)

The national income tax in Turkey is thus levied at progressive rates on individuals’ net annual income; no local income tax is imposed. (Turkey: Individual Taxation, IBFD Tax Research Platform (last updated Nov. 15, 2014), IBFD online subscription database; Gelir Vergisi Kanunu [Income Tax Law], Law No. 193 (Dec. 31, 1960, as last amended Dec. 30, 2014), MEVZUAT online legal database.)

The Ministry of Finance also made public, on December 27, 2014, a blacklist of taxpayers whose unpaid taxes and fines exceed TRL100 million. The list includes “the taxpayer’s name, business name, tax identification number, the type of economic activity, the accrued tax and the fines claimed by the tax administration.” (Emrah Ferhatoglu, Turkey: Blacklist of Taxpayers Published, TAX NEWS SERVICE (Jan. 7, 2015), International Bureau of Fiscal Documentation online subscription database.) A total of 14,247 individual and corporate taxpayers are named on the list, which appears on the Ministry’s website, and some public enterprises and municipalities are also listed. (Id.) Publication of the blacklist is authorized under the Tax Procedure Law, which also allows the Ministry to make public a list of the country’s top 100 taxpayers with their consent. (Id.; Vergi Usul Kanunu [Tax Procedure Law], Law No. 213 (Jan. 4, 1961, as last amended Feb. 19, 2014), MEVZUAT online legal database.)