Turkey has introduced a tax exemption for young entrepreneurs, under 29 years’ old. Provided certain conditions are met, TRY 75,000 of income over three tax periods will be exempt from income tax. Passport fees are also waived in certain conditions. The Law Number 6663 Amending the Income Tax and other Laws (“Amendment Law”) was published in Official Gazette number 29620 on 10 February 2016, entering into effect on the same date.

The Amendment Law makes changes to the Income Tax Law number 193 dated 31 December 1960 (“Income Tax Law”). Accordingly, fully responsible natural persons, under the age of 29, who are subject to income tax liability for the first time (due to commercial, agricultural or professional activity), TRY 75,000 of revenue generated over three taxation periods will be exempt from income tax if:

  • The employment start date is notified within legal notice periods.
  • He/she either:
  • Works in person at their own job; or
  • Has management responsibilities.
  • Professional activities or businesses are not be taken over from spouses, blood-relatives, or up to third degree relatives (except for take over by spouses and children due to death).
  • He/she should not become partner to an existing business or professional activity later on.

If the activity is carried out within an ordinary partnership and unlimited company, all partners must meet the Amendment Law’s conditions.

Even if less than TRY 75,000 revenue is generated, an annual tax return should still be submitted.

The exemption will not apply to taxes paid pursuant to Article 94 of the Income Tax Law.

The Amendment Law also changes Article 85 of the Fees Act Number 492, dated 2 July 1964. Accordingly, passports issued for persons under 25 years’ old who are still pursuing academic studies are now exempt from fees.

The Ministry of Finance is empowered to establish implementation procedures and principles for the Amendment Law in relation to amendments to the Income Tax Law.

Please see this link for the full text of the Law (only available in Turkish).

Information first published in the MA | Gazette, a fortnightly legal update newsletter produced by Moroğlu Arseven.