Turkish Tax Implications of For Expatriates Relocating to Turkey

Turkish Tax Implications of For Expatriates Relocating to Turkey

Tax Implications For Expatriates Relocating to Turkey

What are Tax Implications For Expatriates Relocating to Turkey: Turkey is a favorite location for expatriates of the United States due to its relatively lower cost of living and beautiful coastal properties. It offers a very cost-effective Citizenship-by-Investment Golden Visa opportunity — which allows the US Person a more immediate opportunity to expatriate and pursue citizenship. Despite the many benefits Turkey has to offer, one problem with becoming a complication for Taxpayers relocating to Turkey are complex tax rules for persons considered tax residents of Turkey.

Golden Visa Turkey CBI

The Golden Visa Program for Turkey is one of the more cost-effective options for Taxpayers. While it requires a substantial investment — the amounts are not as high as other countries such as Singapore or Australia. It generally requires about a $500K investment (lower threshold for Real Estate acquisition) — or investment into businesses/companies in Turkey. Alternatively, the applicant can also simply deposit money into a Turkish Bank and/or investment in corporate or government bonds in Turkey.

Is the Golden Visa in Turkey Worth it?

The Taxpayer gets an opportunity for Visa or VOA (Visa-on-Arrival) to more than 110 countries, including several Asian countries.

Here are some of the pros/cons of the Turkey CBI:

Schengen Zone Travel

When it comes to a Golden Visa, one of the key benefits are the travel rights for those without a passport — but unfortunately at the current time, Schengen Zone Visa-Free or VOA is not available — a Schengen Visa would be required.

Family Members can Join-in with Ease 

With some CBI Programs, it can be very difficult, time-consuming and expensive to add-on family members — but Turkey makes the process relatively simple.

Dual-Citizenship for Expatriation Purposes

The US requires the Expatriate to have another Passport, which is an opportunity afforded under the Turkey CBI.

Investment in Turkey

Taxpayers can make continues to invest in Turkey.

Education in Turkey

Taxpayers can pursue educational in pursuits in Turkey as opposed to several RBI programs which limit participation in the country’s education and health systems.

Turkish Tax System & Expatriates Relocating to Turkey

While obtaining the Investment Visa in Turkey is less complicated than in many other countries — the negative tax implications of becoming a resident of Turkey may outweigh the positive benefits. Let’s take a look at how the tax system works:

Personal (Individual Tax Rates)

While the individual tax rates vary, they can hit 40% for high-income earners, which is similar to the US.

Corporate Income Tax

The corporate tax rate was 20/22% with current proposals to increase it in 2021 — and the incrementally decrease again thereafter.

VAT Tax 

VAT refers to value-added tax. It takes on many similarities to sales tax, but it essentially kicks in at every stage of the process (e.g., as value is being added) and subtracts prior VAT paid. Different items/product categories may have different VAT percentages (but the general rate on most items is 18%).

Interested in Expatriation from the U.S.?

Our firm specializes exclusively in international tax.

Contact our firm for assistance with getting compliant.