How do freelancers pay taxes in Turkey?

Congratulations on your well-deserved success. But when you become your own boss you need to know some important issues regarding to tax facts.

In this article, I will try to explain your tax obligations as simply as possible.

Therefore stop worrying and do not start overthinking what to do about tax issues. Because there is nothing complicated about freelancer tax responsibilities.

So go ahead and get comfy, and check out my article ☕️

Do I have to set up a company in Turkey?

According to the Turkish Tax code; If you sell goods or services and earn money more than once time in a year you have to open a company to avoid tax risk and penalties. Because these gains are considered as a commercial income.

How do I know which type of business is best for me?

There are three types of companies can a person establish in Turkey. These are;

• Individual Company

• Limited Liability Company

• C-Corp Company

What are important factors to consider in choosing the right type of business ?

• Cost of start up

• Incorporation Process and Time

• Tax Rates

• Running Costs

• Legal Responsibilities

• Exit Opportunities

• Industry Perception for company types

Cost of Start up: Excluding the fee of service provider, individual company has more advantages when we consider establishment costs. Limited liability and C-corp establishment process and costs are nearly same.

Setting up individual company is fast and easy and totally online in Turkey

Tax rates: No matter how large or small your business you will establish, it’s much more important to first get the advice of a tax professional instead of a lawyer. Because the tax ratio is the most significant whilst choosing the right type of company

You can reach us for your questions if you plan to work with a freelancer from Turkey-info@ozmconsultancy.com

Running Costs: Day-to-day operations regardless of the type of your company you have to bear some costs such as wages, stamp taxes, license payments, rents, types of equipment, etc.

Even the type of the company does not affect the monthly costs because of the different procedures and liabilities limited liability and c-corporations running costs are higher than individual companies.

Tax Tip-1:*If you render programming or design services outside Turkey. You have change to pay %20 of it your income tax **(Huge tax advantage)*

Tax Tip-2: You do not have to pay Value added tax if you render service outside Turkey or sell goods.

Tax Tip-3:*And as a freelancer if your age is below 29 there is also important tax advantage too. For three years there is a tax exemption to the gains up to 330.000 TRY **(Young entrepreneurship tax advantage)*

Withholding Tax: As you know withholding tax is the amount of an employee’s pay withheld by the employer and sent directly to the government as partial payment of income tax. Before hiring an employee you should learn the yearly cost of an employee from your CPA company.

Social Security premium: As a freelancer each month you have to pay a social security premium.

Tip-4: if your age is below 29 and open individual company you do not have to pay social security premium 12 months.**(Young entrepreneurship social security advantage)

For more information and tax-accounting services you can reach us info@ozmconsultancy.com