What Is Withholding Tax?
Definition
Withholding Tax (Stopaj): Income tax that the payer deducts from a payment and pays to the tax office on behalf of the recipient. Common on rent, professional fees, wages and deposit interest; the recipient gets the net amount.
Withholding tax (stopaj in Turkish) is income tax that the payer deducts from a payment and pays to the tax office on behalf of the recipient. It is common on rent, professional fees, wages and deposit interest. The recipient gets the net amount, gross minus the tax, and the rate depends on the type of payment.
Where it appears in the formulas
withholding = gross × rate, net = gross − withholding. To gross up a net amount: gross = net / (1 − rate). The withholding tax calculator works both ways; the deposit interest calculator takes the withholding out of the gross interest.
Not VAT withholding
VAT withholding (KDV tevkifatı) means the buyer pays part of the VAT. It is a different rule from income tax withholding.
In Türkiye
Under Türkiye’s Income Tax Law no. 193, art. 94, the common rate on rent paid by a business and on self-employment fees is 20%. Banks also withhold tax on deposit interest.