What does the tax bracket mean in Turkey? How are tax brackets for 2023 calculated?
What does the tax bracket mean in Turkey? How are tax brackets for 2023 calculated?
Everyone who is in the working life and earns income, that is, regularly earning income, has an obligation to pay income tax. However, income tax is a type of tax that is calculated every year according to the rates determined and should be calculated according to earnings rather than a fixed amount. In order to make this calculation, the concept called tax bracket should be taken into account. We write many questions that need to be answered, such as what the tax bracket means and how the tax bracket is calculated, in our blog post.
Income tax base,
Tax bracket is a concept included in tax law legislation and determining the tariffs on which income tax will be applied. In short, it is the table that determines the tax rate and amount that employees and other taxpayers who earn income are obliged to pay to the government in proportion to their income. Income holders or employees make the calculation of the tax bracket according to the tax brackets determined in the earnings ratio, over the rates applicable to the situation they are in, and make their payments to the relevant administration.
Are tax brackets calculated gross or net?
In January 2023, PPI increased by 4.15% compared to the previous month, by 4.15% compared to December of the previous year, by 86.46% compared to the same month of the previous year and by 125.53% according to the twelve-month averages.
Which amounts will be increased at the revaluation rate and reset methods have been published by the Ministry of Finance in the relevant legislation. According to this determination, many amounts such as tax brackets, stamp duties, penalties, fees, exceptions and declaration limits valid in 2023 are recalculated using the revaluation rate we mentioned.
We share the tax brackets and rates for wage income and non-wage income in 2023 for you below:
Tax brackets and rates for wage income:
15% up to 70.000 TL,
10.500 TL for 70.000 TL of 150.000 TL, 20% for the excess
Thank you for 150.000 TL of 370.000 TL, 26.500 TL for more, 27%
85.900 TL for 370.000 TL of 1.900.000 TL, (134.500 TL for 550,000 TL of 1.900.000 TL in wage incomes), more than 35%
621.400 TL for 1.900.000 TL of more than 1.900.000 TL, (607,000 TL for 1.900.000 TL of more than 1.900.000 TL in wage income), more 40%
Tax brackets and rates for non-wage income:
15% up to 70.000 TL
10.500 TL for 70.000 TL of 150.000 TL, 20% more
26.500 TL for 150.000 TL of 370.000 TL, more than 27%
85.900 TL for 370.000 TL of 1.900.000 TL, more than 35%
621.400 TL for 1.900.000 TL of more than 1.900.000 TL, 40% more
Is the tax bracket applied to the person who earns the minimum wage?
As of January 1, 2022, the minimum wage was excluded from tax, and the wages corresponding to the minimum wage were exempted from income and stamp tax for those who earn more than the minimum wage.
What is the situation of taxpayers who benefit from the young entrepreneur exception?
Taxpayers benefiting from young entrepreneur support will be able to benefit from the 2nd amendment of the income tax tariff thanks to the young entrepreneur earnings exception with the amendment of the law published in the Official Gazette on March 12, 2023. according to the tranche, they will be exempt from paying tax on incomes up to TL 150,000 for the year 2023. the tax on incomes up to 450.000,00 TL will be applied as an exception for 3 consecutive years.
