Radical amendments have been made in the Turkish tax system with Income Tax Law (Law no: 7349) published in the Official Gazette numbered 31700 and dated 25.12.2021.

The details of these amendments are as below:

Income Tax Exemption for All Wages

With the new regulation, an income tax exemption would be applied for all wages.

This income tax exemption will be applied as below:

1. Minimum wage income tax exemption is applied on monthly basis.
2. The income tax exemption amount would be the income tax amount calculated over the minimum wage.
3. If the total gross wage of an employee is higher than the monthly gross minimum wage, income tax would be applicable on the total gross wage amount.
4. In that case, the income tax brackets and rates would be determined based on the cumulative income tax base amount, including the exempt part mentioned above.
5. The payable income tax amount would need to be calculated by deducting the income tax amount calculated over the minimum wage in the related month from the total income tax amount calculated over the total gross wage considering the cumulative income tax base.
6. That deduction/exemption amount cannot be higher than the monthly income tax amount calculated over the monthly minimum wage.
7. If employees receives wages from more than one employer, the income tax exemption would only be applicable on the higher wage amount.

• Income Tax Exempted Food Allowance
• Income Tax Exempted Commuting Allowance
• Disability Degree Discount
• Income Tax Brackets of 2022
• Stamp Tax Rate

a. Minimum Wage

In the press release dated December 16, 2021, the Ministry of Labor, along with the Minimum Wage Determination Committee has announced the minimum wage to be effective for the year of 2022, as shown in the table below.

A- AMENDMENTS IN INCOME TAX LAW

1- Income Taxed in the Simple Method Are Exempted from Income Tax

With the relevant regulation, the earnings of taxpayers who fulfill the requirements stated in Articles 47 and 48 of the Law No. 193 and those who are taxed in the simple method and who are not among those who cannot benefit from the simple method listed in Article 51, are exempted from income tax. An annual statement will not be submitted for exempted earnings.

The earnings of the taxpayers who are taxed in the simple method in 2021 are exempted from income tax. The taxpayers concerned will not file an annual income tax declaration, and even if they file an annual tax return due to other incomes, they will not include these earnings in their declarations.

Even if the taxpayers who are subject to the simple procedure will not file a declaration, they will issue and receive documents in accordance with the provisions of the tax procedure law.

2- Contributions Provided from Public Institutions to Farmers are Exempted from Income Tax

With the recurrent Article 20/C added to the Income Tax Law, agricultural support payments provided from public institutions are exempted from income tax with the purpose of supporting farmers and the agricultural sector.