Which expenses are deductible?
The three conditions for a deductible expense and common expenses in one table; meals, phone, rent, vehicles, training, donations and personal spending.
For an expense to be deducted from the tax base, three conditions must be met at the same time:
- Business-related: incurred to earn income and maintain the business.
- Documented: an invoice, e-Archive, expense voucher or self-employment receipt issued in the business's name.
- In the right period: deducted in the year it belongs to.
Common questions
| Expense | Deductible? | Note |
|---|---|---|
| Office rent | Yes | 20% withholding if the landlord is an individual. Rent withholding |
| Working from home (sole proprietor) | Partly | If part of the home is registered as the workplace, the proportional part of rent, fees and bills |
| Electricity, water, internet, phone | Yes | Subscription or invoice in the business's name |
| Meals for employees | Yes | Tax-exempt for the employee up to TRY 300 a day |
| Client meals (entertainment) | Yes | Documenting the business link matters |
| Partner's personal spending | No | Debited to the partner's current account |
| Passenger car expenses | Partly | 70% deductible; depreciation and rent limited. Buying a company car · Car expense limit |
| Computers, furniture | Yes | Items above TRY 12,000 through depreciation. Depreciation |
| Training, courses, books | Yes | If business-related |
| Donations and aid | Limited | Up to 5% of profit; in full for some institutions |
| Tax penalties, late payment surcharges | No | Non-deductible expense |
| Clothing | Usually not | Except work clothes and uniforms |
| Travel abroad | Yes | If the business link is documented; per diems within limits |
| Health and life insurance (for employees) | Yes | Treated as wages, exempt within limits |
Undocumented expenses
Spending without a receipt or invoice, or with a document in someone else's name, cannot be deducted. For services bought from people exempt as small traders, an expense voucher is issued. Expense voucher calculator
VAT deduction is separate
An expense being deductible does not mean its VAT is deductible. For example, VAT on a passenger car purchase is generally not deductible (except for car rental businesses), but it is added to cost and deducted through depreciation.
For document control and expense tracking: Books and e-Ledger