NEWS Accounting        23/12/2020

Turkey extends tax cuts given as relief to businesses from coronavirus pandemic

In a presidential decree published in the official gazette on December 23rd, the Turkish government has extended five months until May 31st, 2021 the tax cuts given on July 31st, 2020 to provide relief to businesses from the coronavirus pandemic.


Tax cuts extended included the withholding tax on rent for workplaces which had been reduced from 20% to 10%. At the same time, the VAT tax cut from 18% to 8% on workplace rental services was also extended five months.


Value added tax (VAT) cut from 18% to 8% on services such as passenger transport; wedding organisations; residential cleaning and maintenance; repair of household equipment; hair dressing services; tailoring, ironing and dry cleaning services; repair and maintenance of cars, motorcycles, and bicycles; and art/cultural activities, and the value added tax (VAT) cut from 8% to 1% on accommodation, restaurants and catering services, and on entrance fees to cinemas, theatres and museums have been extended five months until May 31st, 2021. The cut in entertainment tax on cinema tickets from 10% to zero has also been extended to May 31st, 2021.


The cuts in withholding tax rates on bank deposits introduced on September 30th, 2020 by Presidential Decree No.302 have also been extended until March 31st, 2021. The withholding tax rates changed as follows: on up to one month, three month and six month maturity deposits from 15% to 5%, on up to one year deposits from 12% to 3%, and on deposits of one year or more from 10% to zero. These new tax rates also apply to bank bills and bonds and lease certificates until the same date.


Turkey’s net minimum wage has been raised 50.52% to TL 4,253.40 (USD 319) as of 01.01.2022       Migration communication helpline 157 available for foreigners in Turkey       Read our homepage articles on developments in the Turkish economy       Turkey’s official annual inflation rate rises further to 69.97% in April 2022       Turkey’s official unemployment rate jumps to 11.5% in March 2022       Read our BUSINESS section for latest sectoral and corporate news       Turkey’s population is 84,680,273 as of 2021 yearend       Foreigners visiting Turkey in 2021 increase by 94.1% to 24.7 million       Turkey’s private sector foreign debt is USD 169.4 billion as of 2021 yearend       Turkey’s economy grew 11% in 2021       Foreign Direct Investment to Turkey in 2021 was USD 14 billion       Turkey’s current account records a deficit of USD 14 billion in 2021