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Declaration of Rental Income for Non-resident Taxpayers

According to Turkish tax legislation, rental income from natural persons is called "Real Estate Capital Income".

Obtaining the income in rental income is dependent on the collection principle. Rental income on a collection basis in order to be taxed, it must be collected in cash or in kind.

The collection of the rent in cash means the payment of the rent in Turkish currency or foreign currency. Checks received are also considered as cash collections.

In case the rent is taken in kind (goods, goods, etc.), the collected rents are converted into money with the precedent value in accordance with the provisions of the Tax Procedure Law.

Rental fees of previous years collected by the taxpayers are considered the revenue of the collected year.

7,000 TL (9,500 TL) of the revenue obtained in a calendar year from the rental of buildings as residences is exempt from income tax for 2021 (2022).

Persons who earn rental income from housing do not need to open a taxpayer registration at the tax office and submit a declaration for this income, if they earn rental income below the annual exemption amount (exception amount 7.000 TL for 2021, 9,500 TL for 2022 ).

In case the housing and workplace rental income is declared together, the exception is only applied to the housing rental income. No exception is applied to workplace rental income.

Those who have to declare their commercial, agricultural or professional income in addition to their rental income cannot benefit from the exception of 7,000 TL.

In addition, those who earn 7.000 TL (9,000 for 2022) or more from residential rental income, and those whose wages, securities capital income, real estate capital income and other earnings and revenues in total exceed 190,000 TL for 2021 (250,000 TL for 2022), cannot benefit from the 7.000 TL (9,000 for 2022) exemption.

In the taxation of rental income, the net amount of the income obtained can be determined in two different ways.

• Actual Expense Method

• Lump-sum Expense Method (Except those who lease the rights)

The choice of lump sum or actual expense method is made for all immovable properties. For some of these, real expense, for the other part lump-sum expense method cannot be selected.

Taxpayers who choose the lump-sum expense method cannot return to the actual expense method unless two years have passed.

Taxpayers who choose the lump-sum expense method can deduct the lump-sum expense of 15% of the remaining amount, after deducting the exemption amount from their rental income.

Persons, institutions and organizations listed in Article 94 of the Income Tax Law; In case of renting the goods subject to real estate capital gain, they have to withhold income tax (withholding) from the rent payments they will make.

Non-resident taxpayers do not submit annual returns for their real estate capital gains, all of which have been taxed with withholding in Turkey.

If they submit an annual declaration for other incomes, they do not include this income, which is subject to withholding, in the declaration.

From taxpayers whose income subject to declaration consists only of real estate capital gains;

• Those whose housing rental income in a calendar year exceeds the exemption amount (7,000 TL for 2021 – 9,000 TL for 2022),

• Those who obtain untaxed rental income by withholding as a result of the rental of goods within a calendar year,

submit an annual declaration.

Non-resident taxpayers are required to submit their annual income tax returns between 1 - 31 March 2022 for rental income subject to declaration for the period of 1 January 2021 - 31 December 2021.

The income tax calculated for the rental income obtained in 2021 must be paid in two equal installments in March and July 2022.

Income subject to income tax for 2021;

rate is taxed.

Please contact us for detailed information and consultancy.

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