Service based on personal labour
Where you provide the service through your own labour, it is professional income: a professional earnings ledger is kept and a professional receipt issued.
Foreign income
Developers and freelancers earning from abroad
If you provide software, design or consultancy services to a client abroad, the income is taxable in Türkiye — but the law contains reliefs that substantially reduce it. Structured badly, none of them can be used.
Basics
Start with this distinction
Your taxpayer category determines which relief is available.Activity based on organisation
Where a team, capital and organisation dominate, the activity is commercial income: operating or balance-sheet books apply and invoices are issued.
Limited or joint-stock
If the activity runs through a company, corporate tax applies and reliefs are applied to corporate income.
The main relief
Earnings deduction on services provided abroad
Where a service is provided from Türkiye to a client abroad and used abroad, a substantial part of the resulting income can be deducted from the tax base.Deduction rate80% → 100%
The 80% deduction applied to services such as architecture, engineering, design, software, medical reporting, bookkeeping, call centres, product testing, data storage and processing, education and health was raised to 100% on condition that the entire income is brought into Türkiye.
- The service must be provided from Türkiye and used abroad.
- The client must not be resident in Türkiye and the service must not be enjoyed here.
- The deduction applies to the income from the activity, not to gross revenue.
- For the 100% rate the whole income must be brought into Türkiye within the filing period.
- Records for this activity must be kept separately; mixed records put the deduction at risk.
Value added tax
VAT on exported services
A service provided to a client abroad and used abroad is exempt from VAT. The invoice is issued without VAT. Input VAT incurred on these transactions may be reclaimed, which requires its own documentation.
| Item | Treatment |
|---|---|
| Invoice | No VAT charged; the exemption is noted |
| Return | Shown on the exemption line of the VAT return |
| Input VAT | Recovered by refund or deduction |
| Documents | Contract, invoice and bank records showing the payment came from abroad |
Starting out
Young entrepreneur relief
Those registering as taxpayers for the first time and meeting the age condition are exempt from income tax on a set amount of earnings for three tax periods. The amount is increased annually by the revaluation rate. Conditions include personally running the business and registering for the first time.
Practice
What to watch in practice
- 01
Collect through one channel
Amounts arriving through payment intermediaries must be traceable to an invoice. Mixed collections put both the deduction and the VAT exemption at risk.
- 02
Record exchange differences correctly
The difference between invoice date and collection date is recorded as income or expense, using the Central Bank rate on the collection date.
- 03
Put the contract in writing
The nature of the service, where it is used and the fee must be explicit. This is the first document requested on an audit.
- 04
Separate platform deductions
Platform commission is an expense and the gross amount is revenue. Recording the net receipt as revenue is a common and costly error.
Frequently asked
Do I need to issue an invoice for payments from abroad?
Yes. If you are registered, you must issue a professional receipt or invoice for the fee. It may be made out to the foreign client in foreign currency; the entry is made at the rate on the collection date.
Are the earnings deduction and the VAT exemption the same thing?
No. The VAT exemption means no VAT is charged on the service. The earnings deduction reduces the income or corporate tax base. Their conditions and documents differ; one may apply without the other.
Should I set up a company or stay as an individual?
It depends on income level, expense structure, whether there are partners and your dividend plans. At a small, single-person scale individual registration is usually lighter; as income grows and partners join, a company comes forward. Do not decide without running the numbers.
What if I do not bring the money into Türkiye?
The highest deduction rate depends on bringing the entire income into Türkiye. Otherwise a lower rate applies. Obligations on declaring foreign accounts and assets should also be reviewed.
This page is general information based on the legislation in force at the time of writing. Amounts change annually. Talk to us before applying it to your own situation.
Other guides
Real estate
Rental Income
The residential exemption, lump-sum versus actual expenses, withholding on commercial rent and the filing thresholds.
Doctors, lawyers, architectsProfessional Income
The professional earnings ledger, receipts, withholding, VAT and the cash basis — for doctors, lawyers, architects and consultants.
HaulageTransport and Logistics
Why the expense restriction does not apply to commercial vehicles, the VAT exemption on international haulage, and waybill discipline.
Construction worksConstruction and Subcontracting
Which year the income is declared, offsetting the 5% withholding on progress payments, and allocating shared costs.
Food and beverageRestaurants and Cafés
Two VAT rates on one bill, cash registers, wastage and portion costing, and payroll with high staff turnover.
Let us talk about your own position
The guides give the general framework. Let us work out which rule applies to your specific facts.