Calis Beach and Fethiye Turkey Discussion Forum
Calis Beach Forum => Expat & Property Owners Q and A Forum => Topic started by: Kevin Sowten on October 12, 2012, 09:44:01 AM
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Do ex-pat retirees have to pay tax on their pension and investment incomes in Turkey ?
If so, what is the threshold and tax rate ?
Also, does the bank deposit interest rate apply from the day you arrive or is there a qualification period ?
(i.e. do you have to have residency before you can open an account - how long does this take ?)
TIA
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you need a tax number to open a bank account as tax is deducted at source from any interest you accrue at 20per cent. you can get a tax number without residency, your passport with 2 copies at the tax office in Fethiye will be enough. If you are still resident in the uk then you should also declare to the uk tax any earnings from overseas earnings. Somebody else will be able to advise re threasholds but I dont think there are any on interest from investments.
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So am I right in thinking that the 9(ish)% bank interest rates referred
to on this forum are after the 20% tax has been deducted ?
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before, I think
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The bank interest rate of 9ish% is per year. In order to work out your turkish tax paid it is (investment) x (interest rate) x period (as proportion of a year) giving net profit; the bank will take 20% of that profit as tax. It works with my repo account beautifully
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As far as I am aware the Turkish government do not tax pensioners so if you are resident and registered to pay Turkish tax you then get the UK pension tax free
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You need the necessary forms from HMRC in the Uk to request you pay the tax on your pensions in Turkey.Once filled you nedd the local Muhtar to sign and stamp the forms before returning them to the Uk.Any back tax will be refunded but not on any Local Government or Forces pensions.The tax rate for pensions in Turkey is 0%.
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As far as I am aware the Turkish government do not tax pensioners so if you are resident and registered to pay Turkish tax you then get the UK pension tax free
The Turkish tax rate for pensions is 0% but at that rate nobodys going to come knocking on your door if you do not put in a tax return. In order to get your UK state pension paid gross you need as has been said to make an application to HMRC.
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If hubby was to retire this year or next and we applied for residency in Turkey would that then mean he could have his pension paid in to the bank without having to pay tax? thanks for any replies :)
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I'm not sure about state pension as I'm still to young to receive that (really) but I have two occupational pensions, one of my pension providers won't pay into a foreign account and so I have no option than to be taxed at source in the UK. The other pension is paid into a bank here but only after being taxed at source in the UK and I have to pay a transfer fee each month. Apparently, I need forms translated and signed by the tax office here to apply to have my pension payed gross. I hear people have done it but it doesn't seem to be the most popular thing to do.
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Ok thanks Rimms, it would be his pension from work we are not old enough yet for the state pension (thank goodness :)) but I cant have access to any work ones for another four years so every penny would come in handy if living on just one pension, will have to look into it all I think :)
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If you keep a UK bank account open and continue to have all pensions (company and state) paid into it.
Inform HMRC that you permanently reside in Turkey and you will not be taxed in UK.
You can then transfer the money to a Turkish account at the earliest opportunity to maximise interest.
If I've got it wrong please let me know ;)
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Thanks Kevin for the info just say we were "flitting" between both UK and Turkey but in Turkey more then the UK could we still do this do you know??many thanks in advance :)
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The following link should help :)
http://www.hmrc.gov.uk/cnr/faqs_general.htm
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Very useful Marggie - Thanks !!!
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Is there an age limit to be classified as a pensioner as in England, eg. 65, in order to qualify for the nil rate band of tax in Turkey?
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No. Although anyone under 40 would probably struggle to convince the authorities that they were genuine pensioners.
I know of a couple of lads in the Kaya Valley who became pensioners at the age of 39 after they both completed 21 years in the Turkish Army.
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i phoned the inland revenue and asked if i had to declare my turkish bank accounts. He told me that there was no problem taxwise as i was paying the Turkish Tax. If i wasn't paying Turkish tax on my intrest, that would be a different matter. No worries
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I'm fairly sure what he told you is completely wrong.
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My understanding is that if your tax domicile is the UK, you pay UK tax on ALL your earnings. However, if you have already paid tax in another country that has a double taxation treaty with the UK (ie Turkey) you can offset the tax paid in that country against what you pay in the UK.
In simple terms, you pay norma lUK income tax less any tax you have already paid on that income in Turkey.
I'm not an expert so feel free to correct me.
Ian
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On the tax form you fill in for HMRC it asks you if you have any other income and states not to put down any interest on savings that has had taxed deducted.
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I thought perhaps they meant UK based savings. An expert opinion would be useful - if interest in Turkey is charged at 15% and if you are self employed paying 25% on income, I would have agreed with IanK, that you pay tax on the 'outstanding' 10%.
But I am certainly no expert either. Any experts?
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Hi, I am sorry I am not an expert but I have completed my Tax Return in the uk for 2011/2012. As I have an account in Turkey which pays interest and as I am a UK resident I had to fill in the full Self Assessment not the short form. If you go online I think the relavant pages are F2 and F3, you need to claim Foreign Tax Credit Relief, there is a list countries on the site with appropriate codes, Turkey is TUR. I believe I had to pay an addtional tax in this country of 5% as I had already paid 15% in Turkey. HM Revenue & Customs calculated the amount I had to pay for me, they must know how much tax is deducted at source in Turkey, I must admit I had to phone them and get them to help to ensure I did not pay too much tax, I also had to look back at the exchange rates as my interest was paid every three months. I do not know how the system will work if Turkey calculates different deductions of Tax depending on how long you leave your money in for.
I hope this helps!
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Hi fellow contributers, the responses to my former question seem to digress from my original question.. I shall put it another way. Do the Turkish laws have a taxfree pensionable age allowance for all, including foreigners, who are living in Turkey ie us ? If so What is it please ? Sorry for being so heavy, but I feel it will be of interest to many for a factual response. Thanks to all.
:)