Changed VAT rates for Property sale per 2013

Sale of immovable property by enterprises has to be invoiced including VAT of 18%. This is the general rule, but the VAT rate for sale of immovable property by enterprises in the capacity of contracting firms has been adjusted since the 1st of January 2013.

Contractors who build and sell their houses c.q. apartments to consumers will pay much more VAT than they have done until now. With the amendment the VAT rate is not merely depended on the total square meter of a house, but is related to the m2-value calculated on the property value provided by the municipality.

For properties up to a value of 500TL per m2 applies a VAT rate of 1%, between 500 and 1000TL per m2, a rate of 8%, values higher than 1000TL per m2 and for plot land a VAT rate of 18% has to be applied.

Before 2013 the VAT rate was respectively 1% and 18% for floor area less than 150 m² and for area larger than 150 m².
The introduction of the new VAT rate was needed to create equity in the housing market due to that the same VAT rate of 18% was applied for every kind of house without making any difference in places. A contractor who builds an apartment with the same square meter in Istanbul paid the same VAT as another contractor who builds the same apartment in Samsun or Konya. Although the value of the houses could change considerable.

The new rate took effect on the 1st of January 2013, with many objections from the business society!

Minimum Wages Turkey 2013 (1st period)

The Turkish Ministry of Social Affairs and Employment, has announced the minimum wage for 2013, the 1st period of 2013, (1st January 2013 - 30 June 2013).

Every year on the 1st of  January and the 1st of  July the government announces the new wages for the next coming 6 months.

Structure minimum salary

The statutory minimum wage is based on the gross salary for normal working hours, without overtime. You receive this wage on the agreed payment period, f.e. weekly, monthly or every 4 weeks. The gross salary may consist of:

• the (basic) salary in your employment contract has been agreed;
• the allowances for performance, shifts, irregular hours, standby duty and working conditions;
• the fixed bonus for the sales you make any payment and you will receive;
• the rewards of third parties caused by the work.

The total of these amounts shall not be less than the minimum wage.

Pay slip

To avoid problems in the future with the tax authorities, es we recommend to pay the wages exactly as mentioned on the pay slip. If you pay in cash, let your staff monthly sign the pay slip (your accountant will create the slip monthly).

Apartments staff

The legislation distinguishes apartments staff. There are more than 200,000 people who are registered as apartment staff (kapıcı). The government has made ​​an exception for this group allowing an exemption from income tax (gelir vergisi) and withholding tax (withholding tax). The exemption creates a higher net income. The total cost to the employer will remain the same.

MINIMUM SALARY TURKEY
(Period 01.01.2013-30.06.2013)
	16 years and older	Apartment personnel (kapıcı)
Gross salary	978,60 TL	978,60 TL
Social insurance employee	137,00 TL	137,00 TL
Unemployment insurance contribution employee	9,79 TL	9,79 TL
Income tax	51,37 TL	---
Cost of living allowance (aig) (Single and no children)	73,40 TL	---
Stamp tax	6,46 TL	---
Total deductions	204,62 TL	143,79 TL
NET SALARY (incl aig)	773,98 TL	831,81 TL
Total cost for employer	1.140,07 TL	1.140,07 TL

Real Estate purchases Turkey

Amendment in the reciprocity principle already entails 907 sales to foreigners

Despite the fact that Syria, Armenia, Cyprus and South Korea are excluded from the scope of the new amendment 907, other foreigners have already made use of the new amendment by buying real estate in Turkey. After the amendment, Germans have made a purchase of ​​a total of 304.000m2 of land and 11 apartments. The Russians mainly purchased around the Turkish Riviera, they bought 134 apartments.

Since the removal of the reciprocity principle on the 18^TH of May 437.000 m2 of land is sold to foreigners, of which to mostly Germans, but also to the Russians who have a big share around the Turkish Riviera. Due the fact that it is not allowed for Greeks to buy real estate around the Turkish Riviera, they preferred the Anatolian Turkey.

After the change of the reciprocity principle,  907 real estates sold to 183 citizens of different nationalities. 

The following purchases of real estate of foreigners has been done:

In accordance with the Turkish Tapu law the maximum real estate that can be purchased by foreigner is increased from 2.5 hectares to 30 hectares. This increase brings that Germans prefer buying their own land and build a house on it. The Russians on the contrary prefer buying apartments, of which 134 apartments are already sold to Russians. The Greeks have purchased 480m2 of land and 4 apartments mainly in the cities like Ankara and Eskisehir.

According to the Land Registry in the months after the reciprocity principle is lifted, the results regarding the sale to foreigners are: 
Netherlands 33, England 111, Ireland 13, Sweden 50, Norway 61, Denmark 30, Finland 13 and Ukraine 12. 

Remarkably the Czech Republicans, North Koreans, Georgians, Swedish, Greeks, Italians, Japanese, Lebanese, New Zealanders and Serbians have also purchased property in Turkey. 

In total 296 foreigners purchased 368.361m2 ground and arable land, at the same time 661 houses were purchased by foreigners.

The Minister of Environment and Country Planning said that, "The acquired properties are protected under international law. If the foreigners do not meet the purchase requirements, then we have the right to nullify the transfer of the property. Foreigners, who purchase a building ground, are within two years obliged to let their project be approved on the use of the land by the Turkish Ministry.