The Turkish taxation system is based on three major taxes:
- Income Tax: It includes the Corporate Income Tax (the basic corporate income tax on business profits is 20%), Personal Income Tax (varying between 15% – 35% depending on the persons Income) and Social Security Contributions.
- Taxes on Expenditure: It includes the VAT (with a varying rate between 1%, 8% and 18%), Special Consumption Tax for special products or services (luxury products, cars, tobacco and oil products) with a different rate for each one and Stamp Duty for official documentation.
- Taxes on Wealth: It includes inheritance, property and motor vehicles. As in order cases it is a progressive type of tax and the rate will change according to different criteria.
There are tax exemptions and allowances for specific transactions (export of goods, research and development, international transport, etc) or for specific projects the government sets as of special interest. In these cases different tax rates or no rate whatsoever may apply.