I have reviewed a number of the posts in here (and several online resources) about income tax in Turkey, but I wanted to ask a few specific questions.

I am the sole shareholder of a corporation in the US that provides software consulting services to other US companies. I am also the sole employee of this corporation. My corporation pays me a regular salary and withholds the appropriate US taxes as such. In addition to a salary, I also receive direct distributions from the corporation, on which I am also taxed in the US.

I will be moving to Bursa within the next 6 months for the foreseeable future. I will continue to work for my corporation from my home in Turkey. I understand the US Foreign Earned Income Exclusion and the Double Taxation Treaty. My girlfriend in Turkey visited a tax professor at her university who assured her that I would not be taxed in Turkey as long as I proved I was being taxed in the US (most likely with a paystub showing the withholding). This seems highly suspect advice given what I have read regarding Turkish income tax.

So, my questions are these.

1) Am I subject to Turkish income tax, even if my corporation direct deposits my salary into a US bank account?

2) If so, how exactly will Turkey be able to monitor my income (salary and distributions) from my corporation while I am living in Turkey? I want to do things legally, but I am not above a "don't ask questions" approach as well, in effect receiving salary from my corporation "under the table".

3) Will obtaining a Tax Number in Turkey (for a bank account) affect the ability of the tax authorities to monitor my income while I am in Turkey?

As a follow up, I had my girlfriend contact both the Ministry of Finance and the Ministry Of Labor and Social Security and apparently I am above board in all respects and don't have to pay Turkish income tax. They stated that the fee for the Residence Permit coupled with VAT covers my burden on Turkish society. They also assured me, yet again, that I won't need a Work Permit since I am working for an American company (makes sense since I am not taking a job from a Turk). So, it seems, that I am somehow, albeit unintentionally, in some sort of tax shelter as I am able to deduct Foreign Earned Income in the USA (up to a limit) and yet, Turkey doesn't tax me on that income either.

We'll see come tax time if it all pans out like that, but I feel satisfied with everything I have learned. Thanks for your advice. I will not go out of my way to draw attention to myself.

How did you get on with this? I am in a very similar situation at the moment.

Thanks,

Well, I am not in Turkey yet, but so far everything seems to be as I've explained, but we'll have to wait until I get my residence permit and start actually working. I've confirmed the info about as much as possible with both governments so I don't have any surprises, but like I said, we'll see how it works out. I will probably update this post after I start working for a little while.

i am looking at how best to settle in Turkey, but remain employed by my current UK employer and to be paid in the UK.

Seems that I have the choice of either being taxed in the UK or in Turkey (on the locally converted currency). Is that correct?

What are the pros and cons of being taxed in the UK vs being taxed in Turkey?

What about pension and public health schemes schemes??

thanks,
MK

I'm looking to buy an apartment in Turkey and I will live there half the year and the remainder in the UK. I will continue to work in the UK as an employee. Assuming I rent my property out the six months I am not using it surely I will come onto the radar of the Turkish Tax authorities. I guess my question is can I avoid paying income tax in turkey and the uk if I have my uk salary paid to my Turkish bank account?

the question will actually be, can you rent your apartment for 6 months of the year? as virtually all rental agreements are for a 12 month duration.

I was wondering how this turned out for you. One of the issues I thought you might face is that your long term residence permit (issued by the police authority) might require you to say that you are "not working" and therefore put you into a dilemma.

I found it interesting that the work permit authorities (dept of labor) advised you in advance that it was ok for you NOT to get a work permit . In the past 5 years they have made it more difficult for foreigners to get work permits at all.

Just tell in your native country you will work abraod and u dont have to pay taxes there, then dont tell anyone here in Turkey u are having salary anywhere...

None will ask anything from you!

I would say that you have really done a commendable job in this regard , I would appreciate the piece of work that has been done by you.

How to start on income tax returns? Hi, I'm planning to file my income tax this year on my own. Previously I've had help from family members (who did most of the paper work and what have you). Are there any good resources to guide me along the way that are easy to read? It would be great if they covered free e-filing and if the sources are reusable (updated to reflect the ever changing tax laws), but anything current will do. I do not qualify for the 1040 forms.

@ OP and others, Just tell the officials in Turkey that you do not work in Turkey. your earnings are being paid in the US into a US bank account. You work from home in Turkey. I am assuming that this is via the Internet. I am pretty sure the loop hole is stll there where as there is no proper law to cover this particular issue with people working over the internet and being paid by a US company into a US account. You can just claim to be living off your savings.

And for those who will say I am wrong for suggesting he does somethin like this, How many of you sell stuff on Ebay, etc...... That is earned income, do you claim that on your tax returns? Do you pay taxes on those?

It would be better for you to take proffessional advise from some authorized person as CPAs.