The most important thing is that all the renters are obliged to declare income received from residential accommodation and non-residential premises lease.
It is obligatory to inform the government about this type of income from 1-25 March. Turkish Government provides a fast and handy reporting system and you can file a tax return online. In order to do it you should have a GMSI code which can be received at taxation office. You are not obliged to file a tax return in case you rent your real estate to your relative.
In case the cost of the rent is more than 500 TRY, the payment must be performed by bank transmission or mail transfer, you can’t receive your income in cash. The same rule concerns rent payment for offices, warehouses and other non-residential premises while the cost of the rent is not considered in this case.
When you plan to file a tax return remember about the tax deductible item which was 3200 TRY (1435 USD) in 2014. This sum can be held back from the rent income before you count the sum needed to pay the tax. Moreover, 25% of the spread between the income received and the tax deductible item is considered to be your embedded component and it is not appraised value.
Let’s take for example that you rent an apartment out for 500 TRY (225 USD) per month. You will receive 6000 TRY for one year from your tenant. Hold back 3200 TRY (it is tax deductible item) and there are 2800 TRY left. The embedded component is 700 TRY from 2800 TRY (25%). The appraised value is 2100. You have to pay 15% tax from 2100 TRY (315 TRY or 140 USD).
As you see, the procedure is not complicated at all.
Text: Jevgeniy Nazarenko