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Could you summarize tax system in Turkey? What are the main taxes in Turkey?

Turkey has one of the most competitive corporate tax rates in the OECD region. The Turkish corporate tax legislation has noticeably clear, objective and harmonized provisions which are in line with international standard.

The Turkish tax system can be divided into three a) taxes based on income, b) taxes on expenditures and c) taxes on wealth.

The generally applied VAT rate in Turkey is set at 1%, 8%, and 18%.

Individual income tax rate varies from 15% to 35%.

Corporations with legal or business centers located in Turkey are qualified as residents and are subject to tax on their income derived in Turkey and other countries. The corporate income tax rate levied on business profits is 22%. Companies are registered with the tax authorities and are given a fiscal registration numbers. Communication with the tax authorities by way of tax returns and tax assessments is largely done in an electronic way.

The base tax rate on wages is 15%, increasing progressively to a top rate of 35%.

The most common withholding tax is dividend tax with a rate of 15%. However, the withholding tax rate on dividend may change according to countries, depending on the tax-treaty.

Other main taxes are i) bank and insurance transaction tax, ii) stamp tax and ii) special consumption tax