Q39: Tax on Turkish Villa
Q39: I have to submit tax on renting my villa. However there are outgoing expenses for upkeep and maintenance. Can these expenses be offset against the tax which I owe? Would it be easier next time to submit my tax return in the U.K.?#
A39.1: Tax returns have to be in by 24th March for the previous year. Normally forms are available by 5th March it is called a 1000B. So the next time to declare is march 2010 for income from 2009. Each year they allow a certain amount to deduct last year was 2400 TL from the total first then you deduct a further 25% for expenses (this is a lot easier than giving every receipt and writing on the forms everything you paid for the property). You also have to give a declared value of the property , you pay anything from 15% of the balance of income in tax up to 7,500TL and it goes up in stages. The tax office in Bodrum are very helpful . If you want to declare now you will be fined for lateness. Also yes, you should declare in Turkey as your income has come from here. -- SimplyVillaManagement.com
A39.2: You can offset expenses but whether or not you submit taxes in the UK & Turkey depends on your residence & domicile status as far as the UK & Turkish tax authorities are concerned. Rule changes in 2008 mean the UK authorities are keener than ever to tax all your income from anywhere in the world if you are UK resident for tax (not the same as having a residence permit). At the same time the Turkish authorities are also very keen to ensure you get taxed on any income you receive in Turkey ... especially if you are resident here. There is a Double Taxation Agreement between the UK and Turkey but life can get very complicated trying to claim and prove tax relief to avoid being taxed twice. Best to take professional advice but generally try to only get involved with one national tax authority if you can. --Steve