Foreign landlords in Turkey must file taxes by March 25

The tax treatment of income elements gained by foreigners from any source of income has usually been at the top of the international tax agenda and extensively debated worldwide by experts, academics and tax practitioners alike.

In Turkey too, all tax laws, from the inception of the Turkish Republic to the present day, incorporate the concept of "foreigners" into the technical context of taxation via the definition of tax liability in two distinct ways.

Strictly speaking, tax laws designate tax liability as unlimited tax liability and limited tax liability and proceed to envisage different tax treatment processes for these aforementioned liabilities.

Since the subject matter of this article is the tax treatment of income derived from the rental of immovable properties and rights in Turkey by limited liable taxpayers (non-residents), it is wiser to confine the scope solely to the definitions made in the Turkish Personal Income Tax Law (PITL) with regard to tax liability and its implications when applied to income gained from immovable properties and rights.

The PITL employs residency criterion to distinguish between unlimited and limited tax liabilities. Residents are, according to the PITL, individuals with legal permanent residence in Turkey and those who reside in Turkey for more than six months during one calendar year, with the exception of Turkish citizens who live and work abroad for a government agency or a company headquartered in Turkey and are still deemed unlimited liable taxpayers. These individuals are all treated as unlimited liable taxpayers.

Non-residents, on the other hand, are individuals that reside abroad - excluding citizens working for the government or a company headquartered in Turkey. Expatriates...