Turkey

Business Environment

Business practices

For further information

Closed hours and days

Banks are open from 8.30 am to 12 noon and from 1.30 pm to 5.30 pm Monday to Friday.
Public administrations: from 8.30 am to 12.30 pm and from 1.30 pm to 5.00 pm Monday to Friday.
Shops: from 9.00 am to 7.30 pm from Monday to Saturday and the few shopping malls from 10.00 am to 10.00 pm, 7/7.

In some Aegean and Mediterranean regions, public administrations and some establishments close in the afternoon during the summer season. These opening hours are fixed every year by the Provincial Governors.

Public holidays

New Year's Day (Yilbasi)	1 January
Children's Day (Çocuk Bayrami)	23 April
Youth and Sports Day (Gençlik Bayrami)	19 May
Victory Day (Zafer Bayrami)	30 August
Ramadan (Ramazan Bayrami)	31 August 2008 (changes every year)
Sugar Festival (Seker Bayrami)	30 September, 1 and 2 October 2008 (30 days after the festival of Ramadan)
Republic Day (Cumhuriyet Bayrami)	29 October
Festival of the Sacrifice (Kurban Bayrami)	20, 21, 22 and 23 December 2008 (changes every year)

Compensation day: If a public holiday falls on a week-end, it is not compensated for.

Periods when companies usually close

Cf. above

Standards

National standards organizations: Turkish Stardards Institution
Integration in the international standards network: - Member of ISO (International Standard organization)
- Member of IEC (International Electrotechnical Commission)
Classification of standards: TSE is the national certification marking.
CE is the European certification marking.
Online consultation of standards: TSE
Certification organizations: TSE
AFNOR

Legal framework

Independence of justice: Although the Turkish constitution guarantees independent judicial power, the government influences judges as it controls appointments, promotions and financing. For further information, click here.
Equal treatment of nationals and foreigners: Turkey is practically a constitutional State and reforms are introduced where necessary with a view to joining the European Union. Foreign nationals can in principle expect to benefit from an impartial trial in judicial matters. Corruption is a big problem and it exists in all domains. The government is introducing laws to fight it, but they are not implemented severely enough. In general, there is a certain culture of tolerance towards corruption among the population.
The language of justice: Turkish
Having recourse to an interpreter: Possible
Sources of the law and legal similarities: The main source of the law is the constitution of 1982. The country's judicial system is based on a system of civil law derived from different systems in continental Europe:
- Civil and company law close to the German model
- Law of obligations inspired by the Swiss code
- Penal law inspired by the Italian Penal Code
- Administrative Law inspired by that of France

Turkey is a member of the European Court of Human Rights (ECHR).
Consulting national laws online: Constitutional Council
Law on-line

Intellectual Property

National organizations: Turkey is adapting the legal framework of industrial property to the directives of the EU. The main advances in this domain are the creation of the Turkish Patents Institute (TPI), the introduction of a regime of penal sanctions and the updating of the Law on Trademarks through a series of decrees.
Regional organizations: For the protection of patents: the European Patents Office.
International membership: Member of the WIPO
Signatory to the Paris Convention
Membership to TRIPS

National regulation and international agreements

Type of property	Law	Validity	International agreements signed
Patent	The decree Law No. 551	20 years maximum	Patent Cooperation Treaty Strasbourg agreement concerning the International Patent Classification
Trademark	Trademarks Law 1995 / Decree Law N° 556	10 years	Trademark law treaty Nice agreement concerning the International classification of goods and Services for the Purposes of the registration of Marks Protocol relating to the Madrid Agreement concerning the International Registration of Marks
Design	Industrial Design Law 1995 / Decree Law N° 554	10 years, renewable once
Copyright	Copyright Law 1995/	During the life of the author and until 70 years after his death	Berne convention for the protection of Literary and Artistic Works Rome convention for the protection of performers, producers of phonograms and Broadcasting organizations WIPO copyright treaty WIPO performances and Phonograms treaty
Industrial Models	Industrial Design Law 1995 / Decree Law N° 554	10 years

Tax rates

Consumption taxes

Nature of the tax: KDV: Katki Deger Vergisi (= Value added tax)
Tax rate: 18%
Reduced tax rate: 1% and 8%.
Other consumption taxes: OTV (Özel Tüketim Vergisi = Special consumption tax) concerns petroleum products, vehicles, tobacco, alcohol, sodas and luxury products.

Corporate taxes

Tax rate

20%

Tax rate for foreign companies

Turkish companies are taxed on their global income, while companies whose headquarters and "effective management" are abroad are only taxed on their income in Turkey.

Capital gains taxation

Long term capital gains are taxed in Turkey at the normal IS rate.

Main allowable deductions and tax credit

40% of expenses for research and development inside a company are deductible from the tax base. For further details, click here.

Other corporate taxes

For further information, click here

Individual taxes

Tax rate

The progressive rate is spread from 15% to 35% according to the tax bracket. The income tax scale for 2007:	:
From 0 to 7 800 YTL	:	15%
From 7 801 to 19 800 YTL	:	20%
From 19 801 to 44 700 YTL	:	27%
Over 44 701 YTL	:	35%

Allowable deductions and tax credit

The set annual deduction must not go over 35% of the salary. There are other deductions which depend on each person's status (marriage, dependent children, etc.).

Special expatriate tax regime

There is no tax for expats. Equal treatment for locals and expats.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: Worldwide Tax .
Whithholding taxes
Bilateral agreement

Sources of fiscal information

Tax Authorities: For further information, you can consult the files concerning the Turkish tax system offered by PriceWaterHouseCoopers Turkey.
Other domestic resources: Inland Revenue Administration

Accounting rules

Tax year: The tax year begins on 1 January and finishes on 31 December of the same year.
Accounting standards: Since the control of accounts has no longer been totally under government influence, account certification has been carried out in agreement with the " Turkish Code of Commerce".
The results obtained have to be sent to the Ministry of Finance.
Accounting regulation bodies: Banking Regulation and Supervision Agency
Organization of Turkish accounting standards
Accounting reports: CONSOLIDATED BALANCE SHEET
ASSETS
FLOATING ASSETS
- liquid assets
- Treasury bonds
- short term investments
- receivables
- stocks
- other floating assets
TOTAL FLOATING ASSETS (I)
FIXED ASSETS
- commercial receivables
Publication: The balance sheet and the profit and loss account must be expressed in Turkish currency and drawn up in a clear, complete and easily understandable way quarterly and annually (annual accounting balance sheet).
Professional accountancy bodies: Expert Accountants' Association of Turkey
Union of Chambers of Certified Public Accountants of Turkey (TÜRMOB)
Certification and auditing: Audit companies:
- Mazars Denge
- Pricewaterhouse Coopers
Accounting news: Turkish accounting news