Rental Incomes for Non-Resident Taxpayers

Citizens of Foreign Countries not Residing in Turkey and Turkish Citizens Residing Abroad


According to the Income Tax Law No.193, incomes of real persons are subject to the income tax.

Income items subject to the income tax are business incomes, agricultural incomes, salaries / wages, incomes from independent personal services, incomes from immovable property and rights (rental incomes), incomes from capital investment and other income and gains.

Non-resident taxpayers are real persons who are not settled in Turkey in other words who do not have their residences in Turkey and who do not reside in Turkey for a continuous period of more than six months within one calendar year. Non- resident taxpayers shall be taxed only on income and gains which they have obtained in Turkey, they do not file a tax return in Turkey for income and gains which they have obtained in foreign countries.

On the other hand, Turkish nationals who live abroad with a residence or work permit are also considered within the scope of the non-resident taxpayer. According to explanations made in the Communique Serial No. 210 of the Income Tax Law, Turkish nationals who live abroad for more than six months with a residence or work permit shall be taxed on the basis of limited liability in terms of income and gains which they have obtained in Turkey, except for Turkish nationals residing in foreign countries due to their works affiliated with private enterprises whose headquarters are located in Turkey or public institutions.

This guide has been prepared to present explanations and samples about the property and rights which are subject to the rental income, amount of exception for rentral income from house, limit for declaration in workplace rental income, equivalent rental value implementation, expenses which shall be deducted from declared rental income, tax withholding in rental payments, taxation of rental income in terms of Double Tax Prevention Agreements, time and form of rental income declaration, tax schedule, calculation of income tax payable, payment ways, and how to file a tax return on the Pre-filled Tax Return System for the taxation of those who lease their property and rights in 2020.


Incomes obtained from leasing of the property and rights which are stated in the Income Tax Law No.193 is defined as “income from immovable property and rights” and are subject to the income tax in certain conditions.

The liable persons of immovable property’s income are the owners, tenants (persons having the rights to use actually), possessors, servitudes and usufruct right owners of the property and their tenants in the event of leasing of a rented property and rights.


Property and rights which are subject to the rental income are defined in Article 70 of the Income Tax Law. They are mentioned as;

  • Land, building, mineral water and underground water sources, mines, stone pits, production places of sand and gravel, brick and tile fields, saltworks and their component parts,
  • Large fishing net fields and fishponds,
  • Component parts of immovable properties leased separately and all their installations, inventory stock and flooring,
  • Rights registered as immovable property,
  • Searching, operating and franchise rights and their licenses, patent right, trademark, commerce title, any kind of technical drawing, design, model, plan and cinema and television films, audiotapes and videotapes, a secret formula belonging to an experience acquired in industry, commerce and science or rights as right of usage or privilege of usage on a production method,
  • Copyrights,
  • Ships and shares of ship and all the motorized shipment and unloading vehicles,
  • Motorized transfer and draw-frame vehicles, any kind of motorized vehicle, machine and installation and their appurtenance.


Obtaining of rental income is bound to collection principle. In order to tax the rental income in accordance with the collection principle, it should be collected in cash or in kind.

3.1. Collection of Rental Income in Cash
Collection of rental income in cash states that the payment of rent in Turkish Liras or in foreign currency. Received cheques are also taken into account as collection in cash.

• Rental income collected by the taxpayers relating to that year or previous years is taken into account as the income of the year which it is collected in.

Example, if 2017, 2018 and 2019 rental incomes are collected in 2020, these incomes will be taken into account as the income of the year 2020.

• Rental income relating to prospective years which is c ollected in advance is not taken into account as the income of the year which it is collected in but as the income of the years which the income is related to.

Example, if 2020, 2021 and 2022 rental incomes are collected in 2020, each year’s rental incomes will be taken into account as the income of the related year.

In terms of foreign currency, rental payment and gross revenue is calculated according to the exchange rate announced by The Central Bank of Republic of Turkey on collection date.

3.2. Collection of Rental Income in-kind
If the rental payment is collected in-kind (property, ware etc.), payments are valued according to the Tax Procedure Law No. 213.

3.3. Collection and Payment of Leasing by Means of Banks or Postal Administration
Those who obtain a rental income and their tenants;
– For residence, 500 TL or over per month for each house; in case of weekly, daily or similar short-term housing rental regardless of the amount
– For workplace, without a limitation of amount
must make the payments and collection of the leasing by means of banks, financial institutions or postal administrations and are obliged to authenticate their payments and collections through documents issued by these institutions.

Regulations on the subject are included in the Communiqué Serial No. 268 and 298 (the Communiqué related to making amendments on the Communiqué Serial No. 268) of the Income Tax Law.

Since receipt or monthly statement is issued for the payment and collection while using mediums like depositing money, money order, cheque or credit cart by means of banks, financial institutions or postal administrations, these documents shall be accepted as certifying documents. Payment and collection carried out via internet banking are also evaluated in the same scope.

The fine which shall be applied to persons who do not comply with the aforesaid obligations is 5% of each transaction’s amount and it should be no lower than the amount of special irregularity fine determined for that year in accordance with the repeating Article 355 of the Tax Procedure Law.


“The equivalent rental value” is taken as bases in case of low or no value for rental income. According to this basis, equivalent rental income principle shall be applied on the conditions of;
• leaving the immovable property to the usage of other persons for free,
• lower value of rental income of rented immovable property than the equivalent rental

The equivalent rental value in rented buildings and lands is the rental value determined by authorized specific authorities or courts, if it is available.

If there is no renting determination or judgment for the aforementioned building or land, equivalent rental value is 5% of its real estate tax value.

The equivalent rental value in property and rights for other than buildings or lands is 10% of their cost price. If this cost is not known, it is 10% of determined values of them calculated in accordance with valuation of property provisions of Tax Procedure Law.

Example: Taxpayer (A) gave up a flat valued 600.000 TL to one of his/her friends without charge in 2020.

In this case, taxpayer (A) need to calculate his/her rental income on the equivalent rental value.

Equivalent rental value: 600.000 x 5% = 30.000 TL. This amount should be considered as income to be declared.

The equivalent rental value principle is not applied under the following conditions:
• Leaving empty immovable properties to other person’s residence in order to protect the immovable,
• Allocating the buildings to the residence of the property owner’s children, mother and father or siblings (But, if more than one house allocated to the residences of each of these persons, equivalent rental value is not calculated only for one of these houses.

Example, if owner of property has allocated two houses to the residence of his/her child, it will not be calculated equivalent rental value for one house and for the second one it will be calculated.)

• Accommodating of relatives with the property owner in the same house or flat,

• Leasing done by General Budget and by Annex Budget Offices, by provincial administrations and municipalities and by other public institutions and organizations.


The amount of 6.600 TL for rental income from house for the year 2020 (the exception amount of 7.000 TL for the year 2021) is exempted from income tax. If persons, who gain rental income from house, obtain income less than the amount of exception that is established annually (the exception amount of 6.600 TL for the year 2020) are not required to file a tax return.

Example: Taxpayer (B) rented his/her house from 500 TL per month and obtained 6.000 TL annually in 2020. In this case, since the rental income from house is less than the exemption amount of 6.600 TL, it will not be declared by the taxpayer.

In the case the rental income is not declared between the dates in time or the rental income is understated, it will not be able to benefit from the exception amount of 6.600 TL for the year 2020. However, those who submit returns, before any determination is made by the administration, on
their own accord for their rental income which they did not declare or include in their returns on time, will benefit from the related exception.

If the rental income from house exceeds the amount determined for exception, the amount of exception should be deducted from rental income to be declared in the annual tax return.

The exception applies only to rental income from properties that have been rented as house. Taxpayers whose rental income from house under 6.600 TL in 2020 do not file a tax return for these incomes.

If there is a rental income obtained and declared at the same time both from house and workplace, the exception applies only to the rental income obtained from house, not to the rental income from workplace.

Those who have to declare their income from business, agriculture or professional activities and regardless of whether a declaration is required or not, those who gain a rental income above 6.600 TL, of whose gross total of their income including wage, income from capital investment, rental income, other income and gains exceeding the amount of 180.000 TL for the year 2020 jointly or severally, cannot benefit from the exception for rental income from house.

In case more than one person has the ownership of a house, the taxation of the rental income obtained from such house will be subject to 6.600 TL (for the year 2020) of exception separately for each proprietor.

Thus, if the inheritance is not shared, every inheritor will benefit from the exception separately.

In case, a taxpayer obtains rental income from more than one house, the exception shall be applied at once to the total amount of rental income.


In the taxation of rental income, the net amount of the income obtained is determined in two different ways as follows:
• Actual expenses method,
• Lump-sum expenses method (for other than those who lease rights).

The selection of the actual expenses or lump-sum method should cover all immovable property, which means that it is not possible to choose the actual expenses method for some part and the lump-sum expenses method for the remaining part.

Taxpayers opting for the lump-sum expenses method cannot return to the actual expenses method unless two years have passed.

6.1. Deduction of Expenses in Actual Expenses Method
If the actual expenses method is chosen, following actual expenses can be deducted from the gross amount of rental income:
• Lighting, heating, water and elevator expenses paid by lessor for rented property,
• Management costs which are measured according to the importance of property and related with the administration of the rented property,
• Insurance expenses relating to the rented property and rights,
• Interest of debts relating to the rented property and rights,
• 5% of acquisition value of one rented house for 5 years beginning from the date of acquisition (This deduction applies only to rental income of the rented house; non- deductible part is not evaluated as expenditure surplus. This deduction is not valid for houses acquired before 2016),
• Taxes, duties and fees paid for the rented property and rights and rates paid to municipalities for expenses by lessor,
• Depreciation setting aside for rented property and rights, and heat insulation and energy saving expenditures which are made by the lessor and that increase the economic value of the real estate. (These expenditures can be considered as cost if it exceeds 1.400 TL for the year 2020.)
• Repair and maintenance expenses incurred by lessor for the rented property,
• Rents and other actual expenses paid by sub-lessors,
• Rent of the house accommodated by the lessors who rent their own property, (non- deductible part is not evaluated as expenditure surplus),

It is not allowed for taxpayers not residing in Turkey, (including Turkish nationals who reside abroad for a continuous period of more than six months with a residence or work permit) to deduct the amount of rents they pay in a foreign country from their rental income obtained in Turkey.

• Cost of loss, detriments and compensations paid for rented property and rights based on a contract, law or court decree.

Non-residents who have opted for the actual expenditure method should keep the documents showing the expenses incurred for a period of 5 years and submit to the tax office when required.

6.1.1. Calculation of Deductible Expenses in Case of Exception in Actual Expenses Method
In cases where, a taxpayer chooses the actual expenses method and benefits from the exception applied to rental income from house, the amount of actual expenses corresponding to exception is not deductible from gross revenue.

The deductible expenses part corresponding to the taxable revenue can be calculated using the following formula

Deductible expenses = Total Expenses x Taxable Revenue* / Total Revenue

(*) Taxable Revenue = Total Revenue – Amount of Exception for Rental Income from House

Example: Taxpayer (C) rented his/her house in 2020 and obtained 60.000 TL of rental income. Taxpayer, who has no any other income, incurred 15.000 TL of expenditure for his/her property and chooses the actual expenses method.

The amount that taxpayer can deduct as actual expenses will be the amount that corresponds to the taxable revenue of the total expense for 15.000 TL.
Taxable revenue = 60.000 – 6.600 = 53.400 TL
Deductible expense = (15.000 x 53.400) / 60.000 = 13.350 TL
In this case, the amount of actual expense to be deducted from the rental income is 13.350 TL.

6.2. Deduction of Expenses in Lump-sum Expenses Method
Taxpayers opting for the lump-sum expenses method can deduct the lump-sum expense at the rate of 15 % on the remaining amount after deducting the amount of exception from their rental incomes against actual expenses.

It is not possible to opt for lump-sum expenses method in the case of leasing rights. For instance, taxpayers, who gain office rental income and income from leasing rights, should choose actual expenses method since they should declare rental income from leasing rights at their tax return.

Taxpayers who have opted for the lump-sum method can deduct as a lump- sum expenses at 15% of their revenue. The lump-sum expenses rate is determined at 15% of the revenue to be applied to rental income from the date of January 1st, 2017. (The lump-sum expense shall be
calculated on the remaining amount after deducting the amount of exception for taxpayers who obtain a rental income and who are able to benefit from the exception for rental income from house.)


Any decrease occurring in the capital itself which is subject to income from immovable property is not considered as loss and is not accepted as expense when determining the gross income amount.

Losses arising from the expenditure surplus in the calculation of the net amount of income from immovable property can be deducted from income to be declared in the following years not for more than 5 years.

There are two exceptions for this rule:
• In the event of any loss resulting from deducting the amount of the rent of the house or lodging paid by the lessor from the rental income of their house, such loss cannot be subject to deduction from the income from immovable property to be obtained in the following years.

• Non-deductible part of the amount corresponding to 5% of the acquisition value which has been subject to deduction of income from the immovable rented as house is not considered as an expenditure surplus.

Accordingly, it is not possible to consider an expenditure surplus as loss in these situation.


Persons, corporations and entities who rented property and rights in accordance with Article 94 of Income Tax Law are obliged to withhold income tax on the gross amount of payments made for rent.

Persons, corporations and entities in question that are tenants have to withhold income tax from the gross amount of their rental payments at the rate of 20%. According to President of the Republic Decision No. 2813 published in the Official Gazette No. 31202 and dated July 31st, 2020;

The withholding rate applied in accordance with the Income Tax Law on rental payments made in cash or account between the dates of July, 31st 2020 – December, 31st 2020 has been determined as 10 %. (According to President of the Republic Decision No. 3319 and dated October, 22nd 2020, the withholding implementation which is 10% has been extended until May, 31st 2021.)

This withholding tax will also be made from the rent paid in advance for the upcoming months and years.

If tenants are taxpayers whose commercial earnings determined according to the simple earning basis, they shall not withhold in rental payments.

In case that the immovable property leased out is used both as house and workplace; the total rent is subject to withholding as long as it is used as workplace partially or in whole.


Non-resident taxpayers do not submit annual returns for their incomes from immovable property which are taxed wholly by withholding in Turkey. Also, in case that they submit annual return for other income, they do not include the income which is subject to withholding tax in their returns.

Taxpayers who have only rental income from immovable property in Turkey will submit annual tax return, if;
• their rental income from house exceeds tax exception amount (6.600 TL for the year 2020); and,
• their rental income not subject to withholding obtain from leasing of the properties and rights within a calendar year.

On the other hand, rental income which is subject to withholding will not be declared the annual tax return regardless the amount.

Every member of a family has to submit a return on their own behalf for the rental income they obtained from the property and rights belonging to them.

On the occasion that minor and restricted persons are taxpayers; the annual return to be submitted on behalf of them is signed by their parents, guardians or curators.

In case of having property and rights with shares, every partner should declare the rental income corresponding to his/her own shares.


Deductions with respect to income to be declared by an annual tax return are specified in Income Tax Law and in other relevant laws. In order to make the following deductions from the income to be declared in income tax return while income tax base is being determined, there must be an income to be declared in an annual tax return and deductions to be made should satisfy the requirements specified in the relevant legislation.

The revenue that is declared at the annual tax return before the other deductions and the revenue loss of former years are deducted would be taken as the base revenue to calculate the amount that would be deducted.


For the period January 1st, 2020 – December 31st, 2020; non-resident taxpayers need to submit returns concerning their income from immovable properties between the dates of March 01st–31st, 2021.

• It is possible to file tax returns via the Pre-filled Tax Return System on the internet.
• If non-resident taxpayers have tax representatives in Turkey, they will submit their returns to the authorized tax office of their tax representatives’ location and if they do not have tax representatives in Turkey, they will submit their returns to the authorized tax office of immovable property location.
• In accordance with the Law No. 3568, returns can also be submitted on the e-Return system by members of profession who have received the mediation authority to submit an electronic return by signing an electronic return mediation agreement with them.

In the Pre-filled Tax Return System, returns will be deemed electronically approved. If the return is sent through normal postal service or private postal distribution companies, it will be deemed to have been submitted on the date it arrives on document registration date at tax office, and if it is sent as registered (First Class Mail etc.), it will be deemed to have been submitted on the date registered on envelope by PTT.


Taxpayers whose incomes subject to the declaration composed of only income from immovable property and rights (rental income), wage, income from capital investment, other income and gains or several of them can submit their returns regarding these incomes, which the Turkish Revenue Administration has prepared previously and has submitted for the approval of taxpayers, via the Pre-filled Tax Return System which is an easy- to- use and a fast system.

Taxpayers who only obtain rental income, wage, income from capital investment and other income and gains jointly and severally will be able to benefit from the System.

You can access the System and the detailed information on the official webpage ( of the Turkish Revenue Administration.

It is possible to log in to the Pre-fılled Tax Return System by means of;
• ( login by user or e-Devlet method),
• Interactive Tax Office,
• Internet Tax Office.

Also, you can log in to the System 24/7.

Non-resident taxpayers who do not have the Turkish identification number, registration in MERNIS or do not have rental income liability record at tax offices, they will submit their returns to the authorized tax office of their tax representatives’ location if they have tax representatives in Turkey; if they do not have tax representatives in Turkey, they will use the system after being registered to the authorized tax office where the immovable property is located.

Accordingly, in case there is not any liability record at tax offices and when rental income tax returns prepared on the System are approved electronically, the tax liability registration in the name of taxpayer at tax office and tax accrual transactions are made automatically. Then payments for this rental income tax return can be made through contracted banks or all tax offices. Also, it can be paid via online banking or bank/credit cards of contracted banks.

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