Every month, a Payroll Company in Turkey, known as an employer, faces a tremendous amount of tasks. Additionally, tax months, during which a large amount of working needs doing, also exist and make the situation even more complicated.

Payroll in Turkey overview

Our company offers Payroll Solutions software in order to make paying much easier. Thanks to our Payroll Solution software:

  • Salaries and wages can be recorded
  • National insurance and tax deductions can be calculated
  • Turkish employer’s national insurance contributions are calculated
  • Pay slips are dispensed
  • Payment and deductions are reported

The recording and reporting of payments are generally sufficient if an employee is paid below a certain amount.

Turkish Payroll and Taxation

The company, in Turkey, may employ foreign nationals or local Turks. Nevertheless, there will always be rules for Payroll in Turkey.

Individual tax, social and health insurance costs, payroll tax, sales and business tax are a primary concern for foreign companies in Turkey.

Your Payroll options in Turkey

Usually, foreign companies that lack legal structure contact the PEO Turkey (also known as the professional employers organization).  This company employs and payroll the staff in Turkey.

Foreign companies often prefer it when a local Turkish Payroll company administers their payroll.

Payroll Turkey companies are responsible for the payment of taxes in the entire country.

If a foreign company wishes not to use the services of a PEO in Turkey. They have to register their business and hire their human resources staff on their own. If this approach is used, two new burdens will appear: the costs will be a lot higher, and the foreign companies must now have a solid knowledge of the employment/payroll laws.

Payroll Turkey companies can deal with all aspects of the work force (such as taxes…payslips…social security payments and much more).

Every month, PEO’s pay the taxes and wages relating to the employees and proceed by invoicing the client company in advance.

The equation of Payroll Company invoices is:

TCE (Total cost for employer) + Payroll/Management fees.

Afterwards, PEO‘s provide pay slips to both employees and the clients company.


Turkish corporate tax already westernized

You can easily find a Payroll Turkey Company but if you don’t wish to look for one you’ll need to know that Turkish corporations have been thoroughly westernized. The “modern“ Corporate Tax was spawned with the 3rd of June 1949 law and started being in forced on January 1st 1950. The law was codified and gave birth, in 1950, to the first Corporate Tax Code: the KVK (Kurumlar Vergisi Kanunu), largely influenced by German fashions of taxation. In comparison, the Corporate Tax was first implemented in France, in 1948, and, in Germany, in 1920. The Turkish government’s deliberate inspiration from the provisions German Corporate Tax : Körperschaftssteuer, is already a  the first step towards the westernization and Europeanization of the Turkish tax system.

Regarding tax coding, both the “calculation codes” and “Status codes” are hihgligted. This tax coding is global, but the structures of the codes tend to repeat and resemble each other near major regions such as the U.S, Latin America, Africa or Eastern Europe. So far, Western Europe, isn’t a geographically homogeneous codifying area. Three large families of codes exist. Turkish tax codes, inspired by German law and therefore belonging to the Ibero-Germanic family, were initially a “status code”, the content thus being statutory, containing rights and obligations. Additionally, because of developments that started in the 80s and grew immensely, since the adoption of the new Corporate Tax Code in 2006, the Turkish codification, nowadays, resembles more a “calculation code”, the content of which allows tax calculation to be a lot more precise.

Such a statement also has to be made in consideration of the main codes which are: the Income Tax Code (GVK), the Code of Corporate Tax (KVK), the Value Added Tax Code (KDVK) and the Code of Turkish Tax Procedure (VUK). The current Turkish Corporate Tax Code establishes, in its first article, the list of people falling within the scope of the Corporate Tax and they are:

– capital companies (Sermaye Şirketleri), to which belong: 

public limited companies, limited liability companies;

– limited partnerships;

– investment funds;

– As well as those, foreign companies of various kinds, exist ;

– corporations ;

– economic administrative establishments (Iktisadi kamumüesseseleri);

– associations;

– unions;

– foundations

As Article 25, of the former Corporate Tax Code (KVK) 554, states, the Corporate Tax rate in Turkey was of 30%. It is  now of 20%, in accordance with article 30-1 of the new Turkish Corporate Tax Code, introduced by the law of June 21st 2006, 555. The new 20% rate came into effect retroactively on January 1st 2006 and therefore applies to profits made since then.

Turkey, unlike France, applies the same Tax rate on all Companies. In fact, France, in addition to having the 33.1 / 3% rate, also has a diminished rate of 15% 556, more applicable to small and medium-sized enterprises.

The existence of a tax system governed by one or more tax rates does not mean the system is more modern. The broad majority of European countries have only one corporate tax rate. Therefore, the single tax rate will not serve as a criterium of modernism in this research paper.

The corporate tax base of companies located in Turkish territory is represented by the “establishment profit” (kurum kazanç) established during an exercise period. Turkish tax authorities use the term “establishment profit” to distinguish between profits of different establishments in the goal of guarantying the taxation of the entire business when it has several different establishments. The tax concept of “establishment profit” is even better when the company operates establishments in numerous (pour éviter une repetition) countries.



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