Obligation to Submit a Declaration of the Employee as a result of the Job Change within the Same Year 22 October 2019

As known, pursuant to the Income Tax Law, each natural person listed under Article 3 is a tax payer. Everyone under this obligation, is obliged both to submit the income tax return and then to pay the relevant tax levied on incomes and revenues obtained in Turkey and abroad. The Income Tax Law includes an exception for certain types of income; the income tax levied on the tax payer is also regulated for a person who makes payment that is liable to income tax.

To summarize, according to this regulation, the income tax that must be paid for the incomes within the scope of exception, must be levied (on behalf of the payment acceptor and the tax payer) by a person or an institution liable to pay this income. The taxation system, that arises from the employment agreement/employment relation between the employer and the employee, namely, the taxation system related to the “salary” that employee is entitled to have and earned in return for a work performance is also in this manner. In other words, pursuant to the Article 94/1 of the Income Tax Law, employers are obliged to transfer the income tax arising from the salaries which will be paid to the employee, on behalf of the employee who is a tax payer1, It should be noted that; the responsibility of each employer is to apply the income tax tariff on the basis of the payment amounts to be made to the employee in accordance with the employment agreement of which the employee is a party.

The tax payer’s obligation to submit an annual income tax return is separate and independent from this regulation and is included in the Article 86 of the Income Tax Law. If the tax payer employee has worked with a single employer during the same calendar year, this employee is not required to submit an annual income tax return for the salary. Even if the employee gives a declaration for different incomes other than salaries, the salary will not be added to this income tax return. In this regard, the important matter is that the employee receives salary from more than one employer at the same time and/or at different times during the same calendar year. According to the Income Tax General Communique (Serial Number: 160) 2 and Article 86 of Income Tax Law3;

The employees, who receive salaries from more than one employer during the same calendar year and/or who do job change, are obliged to submit an annual income tax return,
If the sum of salaries from the second and subsequent employers exceeds the amount of earnings4 in the second income tax period the employees are obliged to submit an annual income tax return,

It appears that there is no “obligation to submit income tax returns” on behalf of the employee for the first, second or subsequent employers. This obligation for the employees is considered as a legal obligation and not knowing this obligation will not be deemed as an excuse for the employee Also, for the employee, it is not allowed to raise any claim from the employer arising from the failure of the submission of the income tax return although it is generated an income from more than one employer during the same calendar year and the earnings are exceeding the limit.

The complexity of the situation, which has recently been confronted in practice and has raised various questions, arises from the obligation of the tax payer employee to submit an annual income tax return. Therefore, the natural person tax payers who are notified by the Revenue Administration for the above obligation, should go to the relevant Tax Office within the period to make a statement and pay the remaining tax debts.

1 GVK m.94/1: “… Public administrations and enterprises, public economic enterprises, other institutions, trading companies, business partnerships, associations, foundations, commercial enterprises of foundations, cooperatives, investment fund managers, tradesman and profession experts who are obliged to declare their incomes, farmers who determine their incomes from agriculture according to the balance-sheet and agricultural enterprise account are obliged to withhold the income taxes of the beneficiaries when they do the payment listed in the following paragraphs in cash or on account (including payments made in advance).
2 Income Tax General Communique (Serial Number: 160): “…Accordingly, if an employee receives salaries more than one employer, the salaries paid by each employer are taxed separately. Therefore, the tax tariff is applied separately to the salaries paid by each employer without being interested in the salaries paid by other employer of employers. However, if the sum of the gross amounts of the relevant salaries exceeds the limit stated in the Article 86 of the Income Tax Law, these salaries should be declared with an annual declaration’’ by saying this, a certain limit is drawn and the gross amount sums above this limit are bound to the declaration conditions (Tax Ruling No: 103-708 also contains similar explanations and details).
3 Article 86 of Income Tax Law: “…No annual declaration is given for the following incomes; … c) The total amount of taxable income [except as specified in paragraphs (a) and (b)] which has been subjected to withholding in Turkey, on condition that the tariff under the Article 103 does not exceed the amount in the second income period; salaries from more than one employer, incomes from moveable capitals, incomes from immovable property…’’.
4 According to the Article 103 of Income Tax Law, for the year 2019, the amount of earnings in the income tax period in the second tariff is 40.000 Turkish Liras (“…Incomes which are subjected to Income Tax … TRY 1.320 (TRY 2.7000) for the TRY 8.800 (TRY 18.000) of the TRY 22.000 (TRY 40.000) is taxed at the rate of 20%). 

Other News