March 31 deadline for declarations due to wage income. Wage income is generally taxed without entering the worker’s pocket. The employer withholds the tax and deposits it at the tax office before depositing the worker’s wages in the bank. For wage income exceeding the ceilings set for each year, a declaration is completed between 1 and 31 March.
There is no obligation to file a declaration for those whose salary income does not exceed 650,000 lira from a single employer in 2021. On the other hand, those who receive salary income from more than one employer and those whose salary income of the second and subsequent employers exceeds 53,000 lira in 2021 must submit a declaration. In other words, there is a reporting obligation for those who have earned income of 53,001 TL from one employer and 53,000 TL or more from other employers. Those whose wage income exceeds 650,000 TL from one or more employers are also required to complete a declaration. The obligation to declare winnings exceeding 650,000 lire also applies to athletes.
If the employee files a declaration due to rent or interest income, income from a single employer and less than TL 650,000 is not included in the declaration.
STATUS OF THOSE WHO CHANGE PLACE OF WORK OR COMPANY DURING THE YEAR
In the past, we did not examine whether people who changed jobs during the year or moved between companies belonging to the same employer filed a declaration. The Ministry of Finance has increased its inspections on this issue in recent years. With data obtained from the Social Security Institution (SGK), information such as who changed jobs during the year and who works for more than one employer at the same time can be easily accessed.
The limitation period for tax debts is five years. For this reason, the tax payable can be deducted not only for 2021, but also for those who have changed jobs in the same year within the last 5 years.
HOW IS THE REPORTING LIMIT CALCULATED?
After deduction of social security and unemployment insurance contributions from wage income, the remaining amount constitutes the income tax base. Therefore, when calculating the limit of 53,000 lire applied to wages received from the second and subsequent employers, a deduction of 15% is deducted from the gross salary in the payroll. If there is a disability allowance, this amount is also deducted from the tax base. After deducting these deductions, if the remaining amount exceeds 53,000 lire, a declaration must be completed.
WHAT DO FOREIGN COMPANY EMPLOYEES DO?
With the pandemic, the concept of remote work has changed a lot. The practice of working for a company living in Turkey and located in America or Europe has become widespread. The taxation of the income of these people is different.
In general, for salaries received from employers in foreign countries and not subject to tax deduction, a declaration must be filed with the tax authorities of the place of residence.
Salaries paid by the employer in foreign currency to employees of foreign companies, whose legal and business centers are not located in Turkey, are exempt from income tax. In order to benefit from the exemption, the employer is a limited tax institution, this institution does not operate in a way to generate income in Turkey, the person working in this company is a service person and the payment is salary, the payment to be paid by the tax institution limited to the staff of this institution in Turkey is abroad. It should be covered by their income, the fees should be paid in foreign currency and the fees should not be recorded as an expense in the institution’s accounts. non-resident tax institution in Turkey. Those engaged in sourcing or representing foreign companies in Turkey fall into this group.
Salary payments made in foreign currency to employees of regional management centers established on the basis of the permission obtained from the Ministry of Commerce of limited liability companies whose legal and business centers are not located in Turkey are also exempt from tax. income tax.
THE CREDITOR WHO COMPLETES THE DECLARATION CAN ALSO EXIT
Taxes paid in 2021 are deducted from the tax calculated on the total income of those who complete the declaration. If the new tax calculated is greater than that paid last year, the difference in tax is collected in March and July.
However, those who file the declaration can sometimes become creditors. Those who receive wage income cannot normally declare their education and health expenses as expenses, but they can do so when filing a declaration. They can deduct up to 10% of their reported gross income, education and health expenses, and half of life and personal insurance premiums from their income. The amount of the bonus to be deducted can represent up to 15% of the gross income and the annual minimum salary.
If the tax calculated after deducting said expenses from income is lower than that paid last year, the difference in tax is refunded.