A new withholding tax incentive has been introduced with the Statutory Decree no. 687 published in the Official Gazette dated 9 February 2017 for private sector employers for each employee that would be hired until 31 December 2017, providing the conditions below.
Accordingly, the employees hired by private sector employers as of 1 February 2017 shall:
- be an unemployed person registered to the Turkish Labour Agency,
- not have been registered in the payroll tax certificate of the employee submitted to Social Security Institution within the previous three months of the hiring date,
- be added to the number of employees within the payroll tax certificate of the period December 2016.
For the new employees meeting the abovementioned conditions, withholding income tax, following deduction of living allowance, computed over the portion of the wage equal to the “minimum wage” determined in 2017 (1.777,50 TRY) will not be paid by the employer. Accordingly, the income tax amount after the minimum living allowance shall be cancelled by the tax office subsequent to declaration by the employer.
Employers benefiting this specific withholding income tax incentive may not benefit from similar incentives present in other laws.
Furthermore, the part of the monthly gross minimum salary corresponding to the number of contribution days of stamp tax over the salary payments made in line with the relevant article shall not be declared and paid by the employer.