Who pays?
| Landlord | Tenant | Withholding | VAT | Who does what? |
|---|---|---|---|---|
| Individual | Business (company, sole trader, professional) | 20% | No | Tenant withholds, pays the net to the landlord and the tax via the withholding return |
| Individual | Another individual (not a business) | No | No | Tenant pays the full gross; landlord declares |
| Company or business | Anyone | No | 20% | Landlord invoices and pays VAT on its own return; tenant can deduct the VAT |
The withholding is economically borne by the landlord (an advance on their tax); the tenant is liable to pay it over. If the tenant does not withhold, tax and penalties are claimed from the tenant.
Gross or net?
If the contract says "net TRY 20,000", the landlord must receive TRY 20,000. Gross = net ÷ 0.80: TRY 25,000 gross, TRY 5,000 withholding. The tenant's expense is TRY 25,000.
| Gross stated | Net stated | |
|---|---|---|
| Contract amount | TRY 25,000 | TRY 20,000 |
| Gross rent | TRY 25,000 | TRY 25,000 |
| Withholding 20% | TRY 5,000 | TRY 5,000 |
| Paid to landlord | TRY 20,000 | TRY 20,000 |
If the contract does not say whether the rent is gross or net, disputes can arise; always state "gross including withholding" or "net excluding withholding".
What does the landlord do?
Withholdings are credited against the tax on the annual income tax return. There is no exemption for commercial rent; the annual exemption applies to residential rent. Rental income tax · Declaring rental income.
Legal basis
Income Tax Law art. 94/5-a (withholding), art. 70 (income from immovable property); VAT Law arts. 1 and 17/4-d; Law No. 488 (stamp duty on leases 0.189%).