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Investment in Turkey 2018

Since the economic crisis of 2008–2009, we have been living in a different world. After the crisis, countries started prioritize "taxation" in their financial agenda for sound public funding sources. Both developed and developing countries have increased the "direct tax base" on business profit. The reason for this is that indirect taxation is, generally, a priority in their budget revenues.

In this environment, important initiatives were developed by the G20 and G20 countries started amending their local laws and regulations. As a member of G20, Turkey also started to amend its rules. One recent example is related to "the taxation of digital economy". Because both OECD and EU agree that the current international taxation rules are insufficient concerning the taxation of digital economy. Accordingly, many countries express that digital companies acquire high income in their own markets in the digital economy and that they are required to pay corporate taxes over these incomes. Consequently they are taking actions in order to collect tax. For example, Turkey collects 18 percent VAT over the digital services offered to the individuals by the companies residing abroad, which was brought into force as of January 1, 2018.

This publication "Investment in Turkey - 2018", compiled by KPMG Turkey's Tax Practice, aims to provide general outline of the Turkish tax environment in which foreign investors consider investing and doing business in Turkey. The set of information contained in this publication is an introduction for the foreign investors that plan to take a look into tax and business environment in Turkey. It reflects developments to April 2018) and the information herein is not exhaustive and should be read as a frame. ​

Therefore, the information should not be perceived as the sole basis for investment decisions in Turkey. Detailed advice in tax, accounting, legal and other matters should be sought from professional advisers. I would like to take this opportunity to thank to KPMG Turkey Tax Professionals as the authors of this booklet.