How does Gecici Vergi (quarterly advance tax) work in Turkey?

Gecici Vergi (literally 'temporary tax') is Turkey's mechanism for collecting income and corporate taxes on a pay-as-you-earn basis rather than entirely at year end. It is one of the most frequent compliance obligations for Turkish businesses.

Who must file Gecici Vergi The following are required to file quarterly Gecici Vergi: - All companies subject to Kurumlar Vergisi (Ltd. Sti., A.S., etc.) — rate: 25% of quarterly profit - Sole traders with Ticari Kazanc (commercial income) — progressive Gelir Vergisi rates - Self-employed professionals (Serbest Meslek erbabı) — progressive Gelir Vergisi rates

Employees (whose entire income is employment wages) and landlords receiving passive rental income do not file Gecici Vergi — their tax is collected via withholding.

Quarterly deadlines - Q1 (January to March): declaration and payment due 17 May - Q2 (April to June): declaration and payment due 17 August - Q3 (July to September): declaration and payment due 17 November - Q4 (October to December): declaration and payment due 17 February of the following year

Note: Q4 is often forgotten because it falls in the following calendar year — businesses are already thinking about year-end but the Q4 Gecici Vergi is due in February before the annual KV return in April.

How the calculation works The calculation is cumulative year-to-date:

• Calculate cumulative commercial/professional profit from 1 January to the last day of the quarter (using accrual-basis accounting)
• Apply applicable tax rate: 25% for KV payers
• Credit all prior quarters' Gecici Vergi payments paid to date
• Result = net Gecici Vergi payable for the quarter

Example for Q2 (Ltd. company): - Cumulative H1 profit: TRY 1,200,000 - Tax at 25%: TRY 300,000 - Less Q1 payment already made: TRY 100,000 - Net Q2 payment: TRY 200,000

What counts as the taxable base for Gecici Vergi The quarterly commercial profit is calculated using the same accounting methodology as the annual Kurumlar Vergisi but applied to the quarter's data: - Accrual-basis revenue for the period - Less cost of goods sold - Less deductible operating expenses - Less applicable depreciation (Amortisman) for the period - Provisional KKEG (non-deductible expense) adjustments

Investment deductions and final KKEG adjustments are typically settled in the annual return rather than managed quarterly.

Credit against annual tax All four quarters' Gecici Vergi payments are credited against the final Kurumlar Vergisi liability in the April annual return. If total quarterly payments = TRY 1,000,000 and the final annual liability = TRY 1,100,000, the April payment is TRY 100,000. If quarterly payments exceed the annual liability (e.g., company had a strong Q1-Q3 but loss in Q4), the excess is refunded.

Filing via e-Beyanname Gecici Vergi is filed electronically via the GIB e-Beyanname portal. For companies, it typically does not require SMMM countersignature (unlike the annual KV declaration) but most businesses have their accountant prepare and file it.

Underpayment and penalties If the declared quarterly profit is understated by more than 10% compared to the actual profit for that quarter (as ultimately determined in the annual return), the Revenue Administration can impose a Gecici Vergi Tarh: additional Gecici Vergi for the understated amount plus Gecikme Faizi (late payment interest) and a Vergi Ziyai Cezası. Deliberate understating of quarterly profits to reduce Gecici Vergi payments is a common audit trigger.