Primetax Guide: Taxation of Salary Income from Abroad in Türkiye

Introduction

Cross-border employment is no longer limited to traditional expatriate assignments. Executives may relocate to Türkiye while remaining on a foreign payroll, employees may work remotely from Türkiye for an overseas company, and multinational groups may divide remuneration between home and host entities.

These arrangements require a coordinated analysis of the employee’s tax residence, the country in which the employment duties are performed, the entity that ultimately bears the remuneration cost, the applicable double tax treaty and any statutory exemption that may be available.

The fact that a salary is paid by a foreign employer, processed through a foreign payroll or transferred to an overseas bank account does not, by itself, make the salary foreign-source or exempt from Turkish income tax.

The employee’s circumstances and the employer’s legal, operational and accounting structure must be considered together.

1. Tax Residence in Türkiye

Under Turkish domestic law, individuals who have a domicile in Türkiye or remain in Türkiye continuously for more than six months in a calendar year are generally treated as Turkish tax residents, subject to certain statutory exceptions.

Turkish tax residents are, as a general rule, taxable on their worldwide income. Nonresidents are taxable only on income regarded as arising in Türkiye.

Citizenship is not the decisive criterion. A foreign national may become a Turkish tax resident, while a Turkish citizen may, depending on the circumstances, be treated as nonresident.

The domestic six-month residence rule should not be confused with the 183-day test commonly found in double tax treaties. The domestic rule determines whether an individual is resident in Türkiye under Turkish legislation. The treaty’s 183-day test is generally used to allocate taxing rights over employment income after treaty residence has been established.

Where both Türkiye and another country treat the individual as resident, the residence tie-breaker provisions of the applicable treaty must be applied. These provisions commonly consider the individual’s permanent home, centre of vital interests, habitual abode and nationality.

A valid tax residence certificate issued by the competent authority of the other country is normally required where treaty protection is claimed in Türkiye.

2. When Salary Paid From Abroad Is Turkish-Source

For employment income, one of the most important factors is the country in which the employment duties are physically performed.

Salary attributable to work carried out in Türkiye may constitute Turkish-source income even where the employment agreement, employer, payroll and bank account are all located outside Türkiye.

Turkish domestic source rules also consider whether the remuneration is assessed, recorded or economically borne in Türkiye.

Accordingly, an employee working remotely from a home in Türkiye for a foreign company should not assume that the salary falls outside the Turkish tax system merely because it is paid from abroad.

Where an employee performs duties both in Türkiye and abroad, the remuneration may need to be allocated between Turkish and foreign workdays. Travel records, entry and exit information, work calendars and supporting documentation should therefore be maintained.

Bonuses, deferred compensation and share-based remuneration may require a separate allocation based on the service period to which the award relates. An allocation based solely on the payment date may not produce the correct result.

3. Salary Cost Recharges and Turkish Group Companies

The ultimate bearer of the salary cost is a central factor in cross-border employment arrangements.

Where a foreign employer recharges all or part of the employee’s remuneration to a Turkish subsidiary, branch, permanent establishment or project, the recharge may indicate that the remuneration is economically borne or assessed in Türkiye.

This may affect the availability of the foreign-employer exemption, the application of a double tax treaty, the identification of the withholding agent and the assessment of whether the foreign employer has created a taxable presence in Türkiye.

The contractual description of the foreign entity as the employer is not necessarily conclusive where the employee works under the direction of a Turkish entity or the salary cost is ultimately borne in Türkiye.

Intercompany service agreements, secondment arrangements, transfer-pricing policies and accounting records should therefore be reviewed together.

4. Turkish Withholding and Annual Filing Obligations

Turkish payroll withholding and an individual’s annual filing obligation are separate matters.

Where a Turkish entity pays, records or economically bears the salary, Turkish payroll withholding obligations may arise. Where the salary is paid directly by a foreign employer with no Turkish withholding presence, tax may not be deducted at source. The absence of withholding does not, by itself, mean that the salary is exempt from Turkish income tax.

The annual filing rules differ depending on whether the salary has been subject to Turkish withholding.

Where No Turkish Withholding Has Occurred

Where salary income has not been subject to Turkish withholding and does not qualify for a statutory exemption, an annual income tax return may be required if the annual taxable amount exceeds TRY 336,906 for 2026.

The TRY 336,906 threshold corresponds to the annual income tax base of the 2026 minimum wage. The 2026 monthly gross minimum wage is TRY 33,030. After deducting the 14% employee social security contribution and the 1% employee unemployment insurance contribution, the monthly income tax base is TRY 28,075.50. Multiplied by twelve months, this produces an annual income tax base of TRY 336,906.

Accordingly, the test is based on the taxable salary amount rather than solely on the gross cash payment.

Where the threshold is exceeded, the relevant non-withheld salary income must be reported in the annual income tax return. The minimum-wage income tax exemption is then taken into account when calculating the tax payable.

This rule is particularly relevant where an individual receives salary directly from a foreign employer that has no Turkish withholding agent and the salary does not qualify for the Article 23/14 exemption.

Where Turkish Withholding Has Occurred

Different thresholds apply where salary income has already been subject to Turkish withholding.

For salary received from a single employer, an annual income tax return is required if the taxable salary exceeds TRY 5,300,000 for 2026.

For salary received from more than one employer, an annual return is required if either the aggregate taxable salary from all employers exceeds TRY 5,300,000 or the aggregate taxable salary received from all employers other than the employer selected as the first employer exceeds TRY 400,000.

Where either threshold is exceeded, all relevant salary income, including the salary received from the first employer, must be included in the annual return. Turkish income tax already withheld is credited against the income tax calculated in the return.

Where the applicable threshold is not exceeded and the withholding has been properly applied, the tax withheld at source will generally constitute the final Turkish income tax on that salary.

Mixed Payroll Arrangements

Special care is required where an employee receives both salary that has been subject to Turkish withholding and salary that has not been subject to Turkish withholding, including split-payroll arrangements.

The TRY 336,906, TRY 400,000 and TRY 5,300,000 amounts are not interchangeable or alternative thresholds. The TRY 336,906 test applies to salary that has not been subject to Turkish withholding. The TRY 400,000 and TRY 5,300,000 tests apply to salary that has already been subject to Turkish withholding.

The employee’s full remuneration structure must therefore be reviewed, and each category of salary must be assessed under the applicable statutory rules and aggregation principles.

The annual income tax return for salary income earned during 2026 will generally be filed in March 2027. Any resulting income tax is generally payable in two instalments, in March and July 2027.

5. Foreign-Employer Salary Exemption Under Article 23/14

Article 23/14 of the Turkish Income Tax Law provides an exemption for certain salaries paid by nonresident employers to employees working in Türkiye.

This is a narrowly defined exemption. It is not a general exemption for employees whose salaries are paid from abroad.

The principal conditions must be satisfied simultaneously.

First, the employer’s registered office and business centre must both be located outside Türkiye, and the employer must qualify as a nonresident entity for Turkish tax purposes.

Second, the employer must not conduct an activity in Türkiye of a nature that generates Turkish income in relation to the relevant arrangement.

Third, there must be a genuine employment relationship, and the payment must constitute salary.

Fourth, the remuneration must be funded from earnings generated by the employer outside Türkiye.

Fifth, the salary must be paid in foreign currency.

Finally, the remuneration must not be recorded as an expense in Türkiye or charged to a Turkish income-generating activity.

Failure to satisfy any one of these conditions may result in the exemption being denied.

A direct or indirect salary recharge to a Turkish subsidiary, permanent establishment or project may undermine the foreign-funding and no-Turkish-expense conditions. The arrangement should therefore be reviewed before the first payment and whenever the group’s recharge policy changes.

The statutory wording does not require the salary to remain in a foreign bank account. A transfer to an employee’s Turkish bank account should not, by itself, prevent the exemption. However, the payment must be made in foreign currency and the payment trail must clearly identify the foreign employer and the source of the funds.

Where all the statutory conditions are satisfied, the qualifying salary is exempt from Turkish income tax. It should therefore not give rise to an annual filing obligation solely on account of that exempt salary.

6. Documentation for the Article 23/14 Exemption

The exemption should be supported by a contemporaneous documentation file.

The file should ordinarily include the foreign employer’s corporate registry documents, tax residence certificate, organisation chart and evidence that its registered office and business centre are outside Türkiye.

The employment relationship should be supported by the signed employment agreement, job description, reporting lines, payroll records and relevant remuneration policies.

Foreign funding and payment should be evidenced through payroll ledgers, employer bank statements, employee bank records and foreign-currency payment documents.

Intercompany agreements, Turkish general ledger accounts, cost-centre reports and recharge calculations should be reviewed to demonstrate that the remuneration has not been recorded or recharged as a Turkish expense.

The employee’s travel calendar and work-location records should also be retained.

The documentation should be consistent across the employment agreement, payroll, banking records, corporate tax accounts and transfer-pricing documentation.

7. Double Tax Treaty Protection

Where an employee resident in one country performs employment duties in another country, the applicable double tax treaty may restrict the taxing rights of the country in which the work is performed.

Under the short-term employment article contained in most treaties signed by Türkiye, the employee’s residence country may retain exclusive taxing rights only if all three treaty conditions are satisfied.

The employee’s presence in the work country must not exceed the applicable 183-day threshold.

The remuneration must be paid by, or on behalf of, an employer that is not resident in the work country.

The remuneration must not be borne by a permanent establishment or fixed base maintained by the employer in the work country.

The relevant treaty must be reviewed individually because the 183-day period may be calculated by reference to a calendar year, fiscal year or any twelve-month period.

A salary recharge to a Turkish company, the functions performed by the Turkish host entity and the level of control exercised over the employee may affect the employer and cost-bearing conditions.

Remaining in Türkiye for fewer than 183 days does not, by itself, guarantee an exemption.

Treaty protection also does not automatically eliminate Turkish payroll, social security, immigration or permanent establishment obligations.

8. Foreign Tax Credit

Where the same salary is validly taxed both abroad and in Türkiye, Turkish domestic legislation and the applicable double tax treaty may allow the foreign income tax to be credited against the Turkish tax payable.

The credit is generally limited to the amount of Turkish income tax attributable to the relevant foreign income.

The employee may be required to provide the foreign tax assessment, proof of payment and certified or translated supporting documents.

The timing of the foreign assessment and payment should also be considered, particularly where the foreign tax becomes final after the Turkish annual return has been filed.

9. 2026 Turkish Income Tax Rates for Salary

Salary income is subject to progressive Turkish income tax rates.

For taxable salary income up to TRY 190,000, the applicable rate is 15%.

For taxable salary income between TRY 190,000 and TRY 400,000, the tax is TRY 28,500 plus 20% of the amount exceeding TRY 190,000.

For taxable salary income between TRY 400,000 and TRY 1,500,000, the tax is TRY 70,500 plus 27% of the amount exceeding TRY 400,000.

For taxable salary income between TRY 1,500,000 and TRY 5,300,000, the tax is TRY 367,500 plus 35% of the amount exceeding TRY 1,500,000.

For taxable salary income exceeding TRY 5,300,000, the tax is TRY 1,697,500 plus 40% of the amount exceeding TRY 5,300,000.

These thresholds are specific to salary income and should not be confused with the tariff applicable to non-salary income.

The taxable base is not necessarily equal to gross cash salary. Employee social security contributions, eligible deductions, taxable benefits, the minimum-wage income tax exemption and foreign-currency conversion rules should also be taken into account.

10. Common Fact Patterns

Foreign Employee Working Remotely From Türkiye Without a Turkish Group Company

Salary attributable to work performed in Türkiye may constitute Turkish-source income. Article 23/14 should be tested in detail. If the exemption does not apply and no withholding is made, the employee may have an annual filing obligation.

Foreign Employee Whose Salary Is Recharged to a Turkish Company

The recharge may materially weaken the Article 23/14 position and may indicate that the salary is economically borne in Türkiye. Turkish withholding, treaty protection, employer status and permanent establishment implications should be reviewed.

Employee Performing Duties Both in Türkiye and Abroad

The remuneration may need to be allocated according to the location and period of the underlying employment services. Travel records and workday information should be retained, and separate sourcing may be required for bonuses and share-based remuneration.

Employee Present in Türkiye for Fewer Than 183 Days

There is no automatic exemption. The employee’s treaty residence, the identity of the employer, the entity bearing the remuneration and the existence of a Turkish permanent establishment must all be reviewed.

Employee Paid From Abroad Into a Turkish Bank Account

The location of the bank account does not determine the source or tax treatment of the salary. The employee’s residence, work location, identity of the employer, source of funding and ultimate cost bearer remain relevant.

Employee Receiving Salary Through a Split Payroll

The foreign and Turkish payroll components should not be analysed in isolation. The full remuneration package, including bonuses, allowances, benefits and share-based awards, should be reviewed to determine the applicable withholding and annual filing obligations.

11. Practical Implementation Checklist

Before the Arrangement Begins

The employee’s expected workdays, travel schedule and potential Turkish tax residence should be mapped in advance.

The legal employer, reporting lines, host entity, payroll entity and ultimate bearer of the remuneration cost should be identified.

The foreign employer’s activities in Türkiye, potential permanent establishment exposure and Turkish withholding obligations should be reviewed.

The Article 23/14 exemption and any applicable double tax treaty protection should be tested independently. Satisfaction of one regime does not necessarily establish eligibility under the other.

Employment agreements, assignment letters, intercompany agreements and payroll arrangements should be aligned with the intended tax treatment.

During the Arrangement

Accurate workday, travel, payroll, foreign-currency payment, bank and benefit records should be maintained.

Salary recharges, management fees and Turkish general ledger accounts should be reviewed periodically to identify any direct or indirect allocation of the remuneration cost to Türkiye.

Home and host payrolls should be reconciled, including bonuses, allowances, benefits in kind and share-based remuneration.

Any change in the employee’s duties, reporting lines, work location or cost allocation should trigger a fresh tax assessment.

At Year-End

The employee’s annual filing position should be determined by separately identifying salary that was subject to Turkish withholding, salary that was not subject to Turkish withholding and salary qualifying for an exemption.

The TRY 336,906, TRY 400,000 and TRY 5,300,000 thresholds should be applied to the relevant categories of salary rather than treated as alternative thresholds for the same income.

Foreign tax credit documentation should be compiled where the same salary has also been taxed abroad.

A written position paper should be retained, setting out the employee’s residence, income sourcing, exemption analysis, treaty position, filing treatment and supporting documentation.

Conclusion

Salary paid from abroad should not be analysed solely by reference to the location of the employer or the bank account into which the salary is transferred.

The correct Turkish tax treatment depends on the employee’s residence, the location in which the employment duties are performed, the entity that bears the salary cost, the applicable double tax treaty and the conditions of the Article 23/14 exemption.

Cross-border salary arrangements should therefore be reviewed as a single workstream covering individual income tax, payroll, social security, immigration, permanent establishment and intercompany charging.

Treating these matters as separate compliance exercises may produce inconsistent positions and increase the risk of tax assessments, penalties and interest.