Obtaining of Rental Income
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.
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
For example, if 2016, 2017 and 2018 rental income is collected in 2019, this income shall be taken into account as the income of year 2019.
- Rental income relating to prospective years which is collected 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
For example, if 2019, 2020 and 2021 rental income is collected in 2019, each year’s rental income shall be declared in 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.
Collection of Rental Income in-kind
If the rental payment is collected in-kind, payments are valued according to Tax Procedure Law.
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 for each house,
- For workplace, without a limitation of amount
should 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.
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 Tax Procedure Law.
Source: Revenue Administration – Guidebook on Rental Income for Non-Resident Taxpayers
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