Whether a business is established as a sole proprietorship or a company, its tax obligations begin as soon as it is established. In order to fulfill the tax obligations, a declaration must be submitted. So, would you like to examine these taxes and returns that business owners are responsible for together?
Stamp Duty is a tax levied on the papers specified in the list I and II attached to the Stamp Duty Law. If a newly established business leases a workplace, a lease contract is signed. Likewise, a service contract is signed before starting to receive service from the financial advisor. Lease contracts and service contracts are subject to stamp duty as they are included in the lists attached to the Stamp Duty Law. Stamp tax return for signed contracts can be declared by any of the parties. Therefore, stamp duty liability for a newly established business begins with the signing of these two contracts in the simplest sense. Apart from this, purchase or other service contracts signed for the continuation of commercial activities are also subject to stamp duty. The Stamp Declaration of the relevant month must be declared until the evening of the 23rd day of the following month and paid by the evening of the 26th day.
Whether it is a sole proprietorship or a company, employers are obliged to submit a concise declaration for the transactions that they are responsible for withholding tax. Employers may deduct income tax starting from 15% on the wages they pay to their employees, 20% income tax deduction on rent payments, and 20% income tax deduction on the fees they pay for self-employment services such as accounting and attorneyship, with a concise declaration on a monthly or quarterly basis. they have to declare periodically. Establishments employing less than ten workers can file a concise declaration quarterly, provided that the tax office is informed. The Minimum Living Allowance amounts announced by the State are deducted from the income tax amount calculated over the wages and declared with a concise declaration. The Concise Statement for the relevant month is declared until the 23rd day of the following month and paid until the 26th day.
Value Added Tax Return
Sole proprietorships and companies are obliged to submit VAT returns every month. VAT is a consumption tax and is calculated on the transaction and shown on the invoice. Depending on the type of transaction, VAT can be 1%, 10% or 20%. Purchases and sales of goods and services are subject to VAT.
VAT Declaration is declared monthly. The VAT amount collected from the customers with the sales made during the month and the VAT amounts paid for the goods and services purchased from the third parties are also shown in the declaration. If the VAT amount collected from the customers for the transactions subject to VAT within a month is more than the VAT paid to the customers, VAT payment will be made to the employers. In the opposite cases, VAT is transferred and this VAT is transferred to the next month to be subject to deduction.
In addition, transactions within the scope of the exception counted in the VAT Law, export registered transactions and transactions subject to withholding are also shown in the VAT declaration. VAT Declaration of the relevant month must be declared until the evening of the 24th day of the following month and paid until the evening of the 26th day.
Provisional Tax Return
Financial profit/loss situations of businesses or companies are declared quarterly with the Provisional Tax Return. In case of declaration of profit on the Provisional Tax return, the taxes paid are deducted from Annual Income or Corporate Tax.
The temporary tax rate for Income Taxpayers is 15%, and the temporary tax rate for corporate taxpayers is 25% for 2023. The Provisional Tax is declared until the evening of the 14th day of the second month following the closing of the quarterly periods and is paid until the evening of the 17th day. For example, the provisional tax return for the January-February-March period must be filed by 14 May.
Annual Income Tax Return
While all the above-mentioned declaration types are declared for all liability types, whether they are sole proprietorships or companies, the Annual Income Tax Declaration is declared only by income taxpayers. Sole proprietorships, as income taxpayers, declare the previous year's financial profit or loss with their annual income tax return until 25 March each year. Provisional taxes paid within one year are deducted from the declaration. The tax calculated in the Annual Income Tax Return is calculated according to the progressive tranche. This slice starts from 15% and goes up to 35%. Annual Income Tax Return is paid in two installments, the first installment until the end of March and the other installment until the end of July.
Annual Corporate Tax Return
Corporate Tax Return is declared by corporate taxpayers. While businesses declare their annual income tax returns, companies declare their annual profit/loss status with their corporate tax return. The corporate tax rate is 25% for 2023 and it is not a progressive tax like income tax.
Taxes paid with provisional tax during the year are deducted from the Corporate Tax Return. The corporate tax return is submitted until the evening of the 25th day of April of the following month and is paid until 30 April.