lozengelegend

All landlords here are liable for tax on rental income from their property in Turkey. There is a good article in this week's Voices giving examples (although not a scale) of how much and under what circumstances: http://www.voicesnewspaper.com/modu...article&sid=972

But Turkey and the UK have a Double taxation agreement, meaning that UK nationals need only pay tax on income EITHER in Turkey or the UK.

Does that mean owners can choose which country they pay in?

Does this include rental income (I presume so! It does in the UK anyway) and how do you prove to the appropriate tax collector that you are paying your taxes in the other country? (Bearing in mind that UK & Turkish tax offices are unlikely to be able to understand each other's paperwork).

Also, as the tiers of income tax payable in Turkey appear to be 15%, 20% 27% and 35%, does this mean that UK Higher Rate taxpayers (UK 40%) are always better off paying taxes in Turkey rather than the UK where possible, UK Basic Rate taxpayers (UK 20%) are better off paying tax in the UK apart from if their rental income is more than 19.000 YTL a year (about £7,500) and Starting Rate taxpayers (UK 10%) are better off paying in the UK unless their rental income is less than 7.500 YTL (about £3,000) because that is exempt?

Any advice or experience would be welcome!

Yildez

To register to pay tax in Turkey you have to have Residence and inform the Uk tax authorities that you are no longer resident in the UK which you can only visit for 90 days a year. For anyone living in the Uk with a holiday home in Turkey which they let, tax on rental income is payable in the UK.

saoirse

Well actually as you say you inform UK tax authorities and fill in forms stating you will be no more than 90 days a year in UK. However the UK tax men arent actually intrested if u pay in Turkey or not

lozengelegend

Hi Yildez & Saoirse, thanks for your answers.

Actually you don't have to be a resident of Turkey to register to pay tax here - in fact foreign investors & property buyers will know you have to register to pay tax to buy a property or to open a bank account. Not only that but there are certain taxes you HAVE to pay in Turkey irrespective of where you live.

If you are absent from the UK for over 183 days each year and your visits to the UK aren't over 90 days then you're no longer resident in the UK for tax purposes.

But what happens if you are tax-resident in the UK but liable for tax on certain things in Turkey? Like income on a rental property, for example. According to HM Rev (who should know) you might be able to get relief on tax paid in Turkey - ie you don't HAVE to pay all your taxes in the UK.

I don't doubt that the UK couldn't give a monkey's whether you pay your Turkish tax but Turkey certainly does, and for some people it might be cheaper to pay it in the UK, as per my first post!

kap

I'm pretty certain i'm correct on this one. My local tax inspector is actually really helpful (I know I was surprised too). He helped me save a lot when I was doing my accounts for a rental property in UK. If you are a UK resident you must first declare and pay tax on rental earnings on property in Turkey to the Turkish tax authorities. It doesn't matter where that income is paid to you as the property is in Turkey. Then you declare it in UK but you can off set the amount paid in tax in Turkey against your tax bill in UK. In most cases this would mean that no tax would be liable in UK. The important point is it must be declared in both countries. Both tax authorities in Turkey and UK are now using methods such as checking rental websites etc to catch those who have not declared their rental earnings.

tykatem

This is what i've been told too

bodrumsjh

This is my understanding too.

Also in answer to Laura's question about 40% tax - If you are UK tax resident, you cannot choose to only pay the rental tax in Turkey in order to pay less tax than you would in UK. You pay Turkey first and then pay any UK tax that's left (including the difference up to 40% if required) to the UK tax man.

The problem I am having at the moment is that although I know how much to pay in Turkey and I have a Tax No (from opening a bank account), I cannot find out what forms I need or where to actually take the money....

Does anyone out there know?

Stewart

blue nose

Kap is spot on in her answer with regard to the tax liability in the UK on Turkish property rentals provided you are resident in the UK.

lozengelegend

Hmm. Yes that makes a lot of sense actually, paying your tax in Turkey and any extra in the UK.

Regarding actually PAYING your tax, I've found that normally you pay it in the tax office (same place you got your tax number).

This is the Turkish Tax office website which has pages in English (as well as Turkish and German) http://www.gib.gov.tr/index.php?id=466.

According to this booklet on the website: http://www.gib.gov.tr/fileadmin/bey...ntal_income.pdf , aimed at foreign landlords renting out their Turkish property, you do indeed pay at the tax office, or authorised bank's branches, two times a year, in March and July. Apart from that and some tables demonstrating taxbrackets and case studies, the booklet is mainly confusing! (or at least it is if you're looking at it in a room with an average temperature of 36 c...)

But I can't find any valid links for the forms you need to fill out.... anyone?