According to the Income Tax Law, taxation of those who receive wages from a single employer in Turkey is done through withholding tax. Employees in this situation do not need to file an annual income tax return, regardless of the amount. However, with the Law No. 7194, sub-clause 86/1(b) of Income Tax No. 193 was amended, and an arrangement was made in terms of filing an annual income tax return in case the wage amount exceeds 500.000,00 Turkish lira even if it is obtained from a single employer. The Ministry of Treasury and Finance of the Republic of Turkey has determined the implementation regarding this change with the Income Tax General Communiqué no. 311 published in the Official Gazette dated 27.05.2020 and numbered 31137.
Legal Definition of Wages
According to the Turkish Labour Law and Turkish Tax Law, wages are the benefits provided by the money and months (providing the service in return for goods) and represented by money (providing housing, vehicles, etc.) to the employees depending on the employer and a certain workplace. The wage income of real persons within a calendar year is subject to income tax. Wage refers to the income obtained from the employer in return for physical or mental labor.
This revenue can be in the form of money, or it can be in the form of interest that can be represented in kind or in money.
It is determined as a certain percentage of the earnings, provided that the wage is paid under the name of allowance, compensation, cash compensation (financial liability compensation), allocation, raise, advance, contribution, attendance fee, premium, bonus, expense provision or other names, or it is not in the nature of a partnership relationship. It does not change the nature of the wage.
Calculation of Net Wages According to the Turkish Law
The net amount of the wage is the amount remaining after certain deductions are made from the sum of money and benefits provided by the employer (ie the gross amount of the wage).
Real Procedural Taxation of Wages in Turkey
Actual procedural wages are taxed in two ways:
Withholding tax from wages by the employer,
Declaration of the earned wage with the annual declaration.
During the payment of the fee, the tax is deducted and deposited to the tax offices by the responsible persons, which is called the deduction (withholding) method. Principles regarding tax deductions are included in the 94 and following articles of the Income Tax Law. The taxation of the wages obtained in the real method is mainly done with this method.
Subject to Annual Declaration of WagesTaxed by Deduction
First of all, the concept of more than one employer needs to be clarified. What is important in determining whether wage income from more than one employer is obtained is not that the wage earner works with more than one employer at the same time, but that he earns wages by working with more than one employer within a taxation period. For example, if Mr. (A) is a paid general manager of a company and receives an honorarium by taking part in the board of directors of a subsidiary of this company, or if Mr. (B) resigns while working at (X) joint stock company and starts working at (Y) limited company. , both Mr. (A) and Mr. (B) have earned wage income from more than one employer in a taxation period (in a calendar year).
Taxpayers who receive taxed wages through withholding from more than one employer and the sum of the wages they receive from the next employer does not exceed the amount included in the second income bracket of the tariff written in the Income Tax Law (49.000 TL for the calendar year 2020, 53,000 TL for 2021, 70.000 TL for 2022). , all taxed fees with deductions will not be declared with the annual return. Again, as a result of the regulation made with the law numbered 7194, it will be declared if the wage amount exceeds 500.000,00 TL for 2019, 600.000 TL for 2020, 650,000 TL for 2021 and 880,000 TL for 2022, even if it is obtained from a single employer.
