Tax Deductible Expenses According To Turkish Tax Laws
The Turkish direct taxation system consists of two main taxes on income and earnings. The first one is income tax which individuals are subjected. The second one is corporate tax which corporations are subjected. Corporate tax is levied on the income and earnings of capital companies and similar foreign companies, cooperatives, public enterprises, and enterprises owned by foundations, societies and associations and joint ventures.
In this article, we will try to briefly inform you about what kind of expenses and costs can be deducted from revenue in determining net business profit. Accordingly following expenses can be deducted from revenue of companies:
- General expenses made for earning and maintaining business profit
- Food and boarding expenses provided for employees at the place of business or in its annexes
- Expenses for medical treatment and medicine
- Insurance and pension premiums
- Clothing expenses paid for employees (should be appropriate to the nature of the business.)
- Expenses for travel and lodging relevant to the business
- Expenses for vehicles that are part of the enterprise and used in the business
- Taxes in kind such as building, and consumption
- Stamp and municipal taxes and fees and charges related to the business
- Losses, damages, and indemnities paid based upon written agreements, juridical decrees, or by order of law
- Depreciations set aside according to the provisions of the Tax Procedure Law
- Payments to the unions
- Expenses related to the issuance of stocks and shares
- Initial organization and establishment expenses
- Expenses incurred for general board meeting
- Expenses made for mergers dissolutions, and liquidations
- In case of insurance companies, technical reserves required for the insurance contracts still valid at date of inventory
- Profits shares accrued to active partners of partnerships in commendams limited by shares
- Profit shares accrued to partners by participation banks for participation accounts
- Research and development deductions calculated as 40% of new technology and know-how research expenses realized within business.
