Tax residency in Turkey is an option that many digital nomads overlook. Yet, it can offer very low taxes if you qualify for their specific 80% tax reduction.
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Overview of Tax Residency in Turkey
- Progressive tax rates up to 40%
- Income exemption of 80% for qualifying freelancers
- Low minimum social contributions for freelancers
- Corporate tax of 4% for qualifying companies
- Tax residency through legal residence
Benefits of Becoming a Tax Resident in Turkey
The main benefit of becoming a tax resident in Turkey is the tax rates.
If you qualify for their specific regime you can pay personal taxes as low as 8% and a corporate tax of only 4%.
I’ll explain you later in the article how this exactly works and how to qualify.
Furthermore, the fact that Turkey has flexible criteria for establishing tax residency is interesting.
Taxes in Turkey
Let’s now have a closer look at the different taxes that can apply in Turkey.
Personal Income Tax Rates in Turkey
Personal income tax rates in Turkey are progressive:
- <158.000 TRY: 15%
- 158.000 – 330.000 TRY: 20%
- 330.000 – 1.200.000 TRY: 27%
- 1.200.000 – 4.300.000 TRY: 35%
- >4.300.000 TRY (~€86.000): 40%
Dividends are also subject to these progressive tax rates. However, different rules apply depending on the origin of the income:
- Local: dividend payments from local companies are only taken into account for 50%
- Foreign: foreign dividends need to be included for the full 100%
Yet, for foreign dividends you can also get the same exemption of 50% if you own at least 50% of the shares of the company and remit the money back into Turkey.
However, like with everything in Turkey, there is a difference between the theoretical law and the application of it. This was confirmed by many people on the ground, including advisors.
They confirm that in practice you only pay tax on local Turkish income. Any income received from abroad isn’t taxed. Nevertheless, this is a grey area and the Turkish authorities are doing more investigations in this respect.
This is, of course, a nice fact for digital nomads who want to optimize their tax situation while enjoying everything that Turkey has to offer.
Nevertheless, the application of the law can always change in the future.
80% Tax Reduction for Freelancers
If you work as a freelancer, there is also a way to declare all of your foreign income and still pay a rather low tax rate.
You can exempt 80% of your taxable income from taxes if you meet certain conditions:
- Work for foreign clients. Any work performed for Turkish clients will be fully taxable.
- Work in a digital field. Yet, this criteria is interpreted broadly. If you work remotely, you should normally qualify.
- Receive the payments from your clients in a Turkish bank account. Nevertheless, after receiving you can immediately transfer it again.
- Timely and proper invoicing.
Accordingly, you can pay income taxes on only 20% of your revenue.
Because of that, your maximum tax rate will only be 8% and can be even lower depending on your income level.
Social Contributions in Turkey
The amount of social contributions you have to pay will depend on the fact if you work as an employee or as a self-employed invidivual.
If you work as an employee, both the employer and the employee have to pay social contributions:
- Employer: 20,75%
- Employee: 14%
However, there is a maximum amount on which you calculate these contributions. For 2025 the amount is TRY 195.000 per month (currently around €4.000).
Self-employed individuals will need to pay all the social contributions themselves.
For 2025 the minimum amount you need to contribute per month is 7.700 Turkish Lira (currently around €155).
If you want you can increase these contributions in order to qualify for more benefits but this is not necessary.
Furthermore, if you start your business while you are under 29 years old you get an exemption from social contributions for the first 12 months.
Turkish Corporate Income Tax
If you set up a company in Turkey you will have to pay Turkish corporate income tax.
The general corporate tax rate amounts to 20%.Â
Nevertheless, companies can also benefit from the same 80% tax reduction as freelancers if they meet the requirements.
The reduction basically brings the corporate tax to 4%.
Furthermore, a withholding tax of 10% applies to the pay out of a dividend.
However, as discussed, the final tax due will be calculated on the total amount of your income.
Requirements to Become a Tax Resident in Turkey
You can establish tax residency in Turkey in two ways:
- Spend more than 6 months in the country during the calendar year (183-day rule); or
- Have your legal address or the intention to settle in Turkey.
Based on this last criterium you can become a Turkish tax resident by just keeping a legal address there without the need of spending a lot of time in the country.
Nevertheless, if you follow this route, you do need to make sure you don’t end also qualifying as a tax resident of another country.
In that case a double taxation treaty can apply but it will definitely complicate things.
My Tax Perspective on Getting Tax Residency in Turkey for Nomads and Expats
Turkey is definitely a very good option if you qualify for the 80%-reduction as a freelancer or by opening a company.
Moreover, one of the main benefits is that you can become a tax resident by just having your legal address in Turkey so you don’t have to worry about having to be there for half the year, every year.
Yet, Turkish bureaucracy is definitely something you’ll have to deal with along the way. Nevertheless, that’s something we assist on with our trustworthy local partners.
How to Establish Tax Residency in Turkey
Let’s check how you can establish your tax residency in Turkey so you can benefit from their low tax for freelancers.
Meet Tax Residency Requirements
The first step is to make sure you meet the requirements to qualify as a tax resident by meeting the 183-day rule or having your domicile in Turkey.
In order to meet one of those criteria properly you will need to apply for a residence permit or Ikamet.
These are normally granted for a period of one year and can be renewed afterwards. Just spending 6 months in the country on tourists visas won’t get you properly in the system.
Obtain Turkish Tax Identification Number
Next you need to get a tax identification number (VKN) to officially register you with the Turkish tax authorities.
You can request the VKN online through the website of the Revenue Administration. If you can’t complete the online application, you can always visit the local branch of the Tax Office to obtain one.
File Tax Return
Once you have your tax residency in Turkey, you also need to make sure you remain compliant by filing your tax returns.
Make sure to file your tax return before 31 March of the following year.
Yet, if you’re a freelancer, you will already have to make tax prepayments every quarter throughout the year. These prepayment are offset against your final tax bill.
How is Turkey for Digital Nomads?
Many digital nomads have Turkey on their list as a go-to destination. There are various reasons for this:
- Climate: Turkey’s climate is moderate to warm. Yet, in summer it can get a bit too hot in some places so check in advance where you want to be what time of the year.
- Cost of living: although the cost of living has been on the rise in Turkey for the past years, it’s still more affordable than most European countries.
- Diverse lifestyle: from the bustling capital of Istanbul to the small coastal town of Kas and everything in between, Turkiye offers something for everybody.
- Visa: as a tourist most people can stay up to 90 days without the need for a visa. Do you want to stay even longer then you can look into the Turkish digital nomad visa.
Do You Want to Reduce Your Taxes? Work With Me
Navigating tax residency rules can be complex, especially when you live and work across borders.
I help digital nomads and international professionals optimize their global tax strategy, ensure compliance, and make informed decisions for their unique situations.
Let’s make your international tax planning simple and stress-free—get in touch today to discuss your options.