Taxation and the failure to pay it, whether by avoidance or evasion,

is an international hot topic at the moment.

Turkey is no exception and this week, Mehmet Şimşek, Turkey’s Minister of Finance,

entered the debate when he held a press conference to draw attention to a problem

that will be of particular interest to foreign nationals that own and let property.

Mehmet Şimsek: Turkish Finance Minister
Mehmet Şimsek: Turkish Finance Minister

Cutting straight to the chase, the minister said that there would be a crack down

by the Turkish tax authorities on foreign nationals failing to declare the income

earned from holiday letting to tourists and renting properties they have purchased in Turkey.

This is being done off the books,” he said, adding,
Anyone engaging in commercial activities must pay their taxes.
We will crack down on that.”

Turkish authorities aware of the problem

Turkey's Inland Revenue
Turkey’s Inland Revenue

Minister Şimşek said that the Turkish authorities are aware of foreign citizens buying homes

in the Mediterranean and Aegean regions; subsequently renting them.

He stressed that the authorities will clamp down on such operators.

Complaints from tourism businesses

The Finance Minister also said that he has frequent complaints from tourism business owners

about foreign citizens purchasing homes in resort areas and subsequently renting them.

We know there are those who advertise their properties
on the internet and in newspapers in their own countries,
and this is done off the books.

As a result of this they are creating unfair competition.
Whoever engages in any commercial activity, whether
they are local or foreign, we are not going to discriminate.
People must pay their taxes.
We will clamp down on those operating illegally.
It is that simple and clear.”

Thirty billion Turkish Lira for Turkish Treasury

Şimşek also told the Turkish media that, as a result of the recently announced

Government Action Plan for Combatting the Grey Economy,

it was expected that by 2018, the level of Turkey’s grey economy would be reduced.

money

By that time he estimates that 100 billion Turkish liras from undeclared income

will begin to be recorded, producing a significant 29 – 30 billion lira in currently unpaid taxes.

Not to be taken lightly

Whilst this is not the first time that the subject has been raised, it probably won’t be the last.

For towns like Fethiye in particular, it is not one that should be dismissed or treated lightly.

Link to original article in Turkish Hürriyet

For more information about foriegn nationals paying tax in Turkey:
http://www.gib.gov.tr/index.php?id=469

 

12 COMMENTS

  1. I think this is quite right, people should pay their taxes. However this will be a very difficult thing to monitor as many people will find a way round it. It would be a huge task to police. How could you prove that someone was renting a property or whether they were allowing family or friends to stay and not tasking payment?

    • Hi I lived in Fethiye for over 10 years and the amount of ex pats renting out properties with out paying tax was a joke and they used to boast about I am now on a pension and pay tax as I am over the threashold why should these people not pay tax and should also pay back tax as well.

    • It is right that taxes should be paid but when is the Turkish government going to crack down on Turkish builders not paying their workers taxes or insurance . We bought a property in Calis and the building company would not pay their taxes or insurance . They held the owners to ransom and would not release the tapus unless we paid their taxes. We complained to the Turkish authorities and yes you can guess they did sweet f..k all !!!!

  2. They will find it easy, look at rented weeks on Internet web sites used for booking. If the villa owner is not registered for tax, bingo. Very easy

  3. Am I missing something here? Surely if you are operating a holiday let and being paid into a British bank account you would then be paying tax on those earnings within Britain? So paying tax in Turkey too is likely to make the whole thing become ludicrously expensive and many people will just sell up……..I don’t own property in Turkey but visit often and have dreamed of purchasing. However , because of the seemingly over complex system (and the ridiculously low fees for apartment rental anyway) we just don’t think it’s worth the hassle to buy.

  4. Tax is paid in the country in which it is earned. So even if you received payment in the UK you declare the income to the Turkish tax authorities. As Turkey and the UK have a reciprocity agreement on tax you also declare to the UK tax but can set off any monies paid against your UK tax bill

    • Thank you for all the questions and comments so far.

      You may find this article of interest that we wrote some time ago. It includes a handy Turkish guide to property tax and rentals in English published by the Turkish tax office (Maliye)

      Check out the article here.
      It might be a bit out of date but does at least give you an idea of what to expect if you are renting a property in Turkey.

  5. I thought that part of the idea of EVISA was to track down people not paying tax on holiday lets. If you were to have to fill in the address you are going to be staying in whilst in Turkey the authorities would have a cross check then to see if tax was being paid

  6. many business owners be it Turkish or Foreign, who do pay taxes, will dob in the ones who dont. Thats one way of finding out. Tax authorities have a ” dob in a tax dodger ” page in their website.

  7. I have owned a villa in Turkey for nearly 9 years and do declare this to the uk taxman. However expenses seem to exceed income. On average between 1 to 2000 per annum. The villa is usually rented for between 8 to 12 weeks per annum.

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