Accounting and Tax Calendar in Turkey for Foreign Companies

The Basics of Accounting in Turkey: Financial Advisors and Ledgers

In Turkey, companies' accounting and tax filing are usually handled by a certified public accountant (serbest muhasebeci mali müşavir, SMMM). Financial advisors have legal authority; they can file returns on the company's behalf through the Revenue Administration's (GİB) electronic systems and are responsible for the records' compliance with legislation. For foreign-owned companies, working with a financial advisor who is familiar with cross-border transactions and can communicate in Chinese is the first step toward stable operations. The right financial advisor does more than file returns: by providing management with regular reports, they let you see the financial picture of your business clearly.

Turkish companies generally keep double-entry books on a balance sheet basis and use the Uniform Chart of Accounts (Tekdüzen Hesap Planı). The main ledgers are the journal, the general ledger and the inventory book; today most companies keep these ledgers electronically. Records must be kept in Turkish lira, and foreign currency transactions must be converted at the exchange rates set by legislation. This means that transactions with the parent company in China denominated in dollars or yuan must be recorded in the Turkish books at the correct rate and revalued at period ends. Tracking exchange differences correctly is important for realistic profit reporting.

e-Invoice, e-Archive and e-Ledger: How Does Digital Accounting Work?

Invoicing and bookkeeping processes in Turkey are largely digitalized. An e-Invoice (e-Fatura) is an electronic invoice issued between companies registered in the system; if the buyer is not registered or is an end consumer, an e-Archive (e-Arşiv) invoice is used. Many companies also issue delivery notes electronically with e-Dispatch (e-İrsaliye). Which companies are required to switch to these systems is determined by criteria such as turnover and industry; these thresholds are regulated by current legislation, and we confirm the situation that applies to you. Many foreign-owned companies use these systems voluntarily even before it becomes mandatory, simplifying their processes.

Under the e-Ledger (e-Defter) system, the company's journal and general ledger are generated in electronic format at set periods and uploaded to the Revenue Administration's system to obtain a certificate of receipt (berat). This process is run in the background by the financial advisor; however, it requires the company to submit all documents on time: sales and purchase invoices, bank transactions, payrolls, expense documents and contracts with the parent company. The more timely and complete the documents, the more accurate the ledgers and returns. That is why we recommend establishing a simple, regular routine for document flow within the company.

Monthly Tax Calendar: VAT and Withholding Returns

Most companies file a VAT return every month, declaring the output VAT and deductible input VAT for the month and paying the difference. For companies importing goods from China, the VAT paid at import can generally be deducted; for export activities, special mechanisms such as refunds or offsets may apply. VAT rates and detailed rules are set by current legislation; we confirm the rules that apply to each type of transaction for you. With proper documentation, processes such as VAT refunds also go much more smoothly and contribute positively to the company's cash flow.

The other important monthly filing is the Withholding and Premium Service Return (Muhtasar ve Prim Hizmet Beyannamesi). When paying wages to employees, or rent and professional fees to individuals, the company withholds income tax and declares it together with employees' SGK (Social Security Institution) information. Some companies may choose different filing periods under the conditions set by legislation. The deadlines for monthly returns are set by current regulations; at Yeni İpekyolu (New Silk Road) we create a dedicated reminder calendar for each client. This way your management team can focus on the business without having to track any deadlines.

• VAT return and payment
• Withholding and Premium Service Return
• e-Ledger generation and berat upload
• Stamp duty and other related filings
• Notification forms such as Ba-Bs

What Is Provisional Tax and Where Does It Fit in the Tax Calendar?

Corporate tax in Turkey works on a "pay in advance during the period, settle at year end" basis. During the year, companies file provisional tax returns on a quarterly basis on the cumulative profit to date and pay provisional tax; these payments are offset against the tax calculated in the annual corporate tax return. Provisional tax is based on period-end financial statements, so closing the accounts, stock counts and currency revaluation at quarter ends are very important. Managing period ends with discipline prevents year-end surprises.

For foreign-owned companies, provisional tax periods are also valuable management checkpoints. Thanks to each quarter's financial data, management can see the Turkish company's profitability, capital needs and tax burden in good time and report them to headquarters in China. We recommend that the financial advisor prepare a financial summary in Chinese after each provisional tax filing; this allows the parent company to make budget and investment decisions more accurately based on the real picture in Turkey. Yeni İpekyolu provides this summary to its clients regularly and reviews the key points together with them.

Annual Obligations: Corporate Tax Return and Year-End Closing

At the end of each year, the company carries out its year-end closing and files its corporate tax return; after offsetting the provisional taxes paid during the year, the remaining amount is paid or a refund process is started. Year-end work covers procedures such as stock counts, depreciation of fixed assets, reconciliation of receivables and payables, revaluation of foreign currency items and setting aside provisions. The corporate tax rate and filing period are set by current legislation; we confirm the current rules for you every year. A well-prepared closing also gives the new year's budget a solid start.

The annual period also includes corporate governance tasks, such as holding the ordinary general assembly meeting and approving the financial statements and the profit distribution decision. If the company plans to distribute profits to shareholders in China, the withholding tax applicable to profit transfers should be assessed together with the double taxation avoidance agreement between Turkey and China. Planning these arrangements in advance is best; at Yeni İpekyolu we work with you to design a compliant and efficient profit transfer plan. This way your success in Turkey is reflected smoothly and transparently in your parent company.

Transactions with the Parent Company: Transfer Pricing and Cross-Border Payments

Foreign-owned companies often have extensive transactions with the parent company or group companies in China, such as purchases of goods, service fees, license payments or loan arrangements. Turkish tax legislation requires transactions with related parties to be priced according to the arm's length principle and transfer pricing forms and reports to be prepared in line with the legislation. If the parent company lends to the Turkish company, thin capitalization rules must also be taken into account. Structuring these transactions properly from the start also ensures that any tax audits go smoothly.

When paying service fees or license fees abroad, special procedures such as withholding tax and reverse-charge VAT filing may apply; detailed rules are determined by current legislation and bilateral tax treaties. All cross-border contracts, invoices and payment documents should be kept in full and their Turkish translations prepared. Yeni İpekyolu's in-house financial advisors and financial translation team work together to handle tax calculations and document translations at the same time; the records on the Turkish and Chinese sides are thus fully consistent, and the need for explanations during audits is kept to a minimum.

How to Manage the Accounting and Tax Calendar in Turkey Smoothly

The keys to an efficient process are "rhythm" and "communication". We recommend collecting all documents on a set day each month and sending them to the financial advisor, holding a financial review meeting every quarter and planning the closing and profit distribution in advance each year. Appointing a person within the company to manage communication with the financial advisor also ensures that banking, sales and personnel information is passed on in time. Because payroll and SGK procedures are directly linked to tax filings, having them handled by the same team is the most efficient approach. Once this routine is in place, the tax calendar stops being a burden.

Yeni İpekyolu has an in-house team of certified public accountants (SMMM) dedicated to serving Chinese companies in Turkey. We take on every process, from the transition to e-Invoice to bookkeeping, from monthly and quarterly returns to annual corporate tax, from payroll and SGK procedures to transfer pricing documentation and profit transfer planning, and we regularly provide financial reports and tax calendar reminders in Chinese. Contact Yeni İpekyolu to manage your accounting and tax affairs in Turkey on time, transparently and with confidence.