Withholding tax on office rent in Türkiye: what is it and who pays? A short guide to workplace rent

Withholding tax (stopaj) is one of the topics that companies renting an office confuse most. This article gives general information. Rates and rules can change, so be sure to consult your accountant about your own situation.

What is withholding tax?

Withholding tax means that the tax is deducted at source. If the owner of a property rented as a workplace is an individual, the tenant company does not pay part of the rent to the landlord. It pays that part to the tax office on the landlord's behalf.

Who deducts it?

The tenant does. The tenant company declares and pays the tax it has withheld each month with the withholding tax return (muhtasar). The landlord receives the rent with the withholding tax deducted.

What is the rate?

The withholding tax rate on workplace rent has been applied as 20 percent for a long time. This rate is calculated on the gross rent. Confirm the current rate with your accountant.

Net rent, gross rent

Whether the figure in the lease is net or gross matters a great deal.

• If it states gross rent: The withholding tax is deducted from this figure, and the landlord receives less.
• If it states net rent: The landlord receives the stated figure in full, the withholding tax is added on top and your cost goes up.

When you compare two offices, compare the same kind of figure for both.

If the landlord is a company

If the landlord is a company, in general no tax is withheld. The company issues an invoice for the rent and VAT is added to the invoice.

Why does it matter?

The same rent figure results in a different cost for your company depending on who the landlord is and on the wording in the lease. When you compare offers, calculate rent, withholding tax or VAT, and the service charge together.

When you look for an office, we make this calculation together for every option. For the other items, see our article on what to check when renting an office.