How is a self-employment receipt calculated?
Self-employed professionals issue a receipt (serbest meslek makbuzu) to their client based on the gross fee. If the client is an employer, a company or another person obliged to withhold tax, 20% of the gross fee is withheld as income tax (stopaj) and paid to the tax office. VAT is calculated on the gross fee. The amount to be collected is found by deducting the withholding tax from the gross fee and adding the VAT. Working backwards from the net amount received, the gross fee is calculated by dividing the net amount by (1 − withholding rate + VAT rate).
Legal basis
The withholding obligation is based on Income Tax Law No. 193 (GVK), Article 94; the rate for self-employment payments is 20%. The VAT rate is the general rate of 20% under Article 28 of VAT Law No. 3065. No withholding applies to services provided to final consumers, that is, to persons who are not obliged to withhold tax; in this case you can use the "No withholding" option in the tool. Receipts are issued electronically as an e-Self-Employment Receipt (e-Serbest Meslek Makbuzu).
Worked example
For a service with a gross fee of 20,000 TL, the withholding tax is 4,000 TL, the net fee is 16,000 TL and the VAT is 4,000 TL. The amount to be collected is 20,000 TL. When the withholding and VAT rates are equal, the amount collected equals the gross fee. If the same service is provided to a final consumer, no withholding is deducted and the amount collected is 24,000 TL. In both cases, the gross fee of 20,000 TL is the amount recorded as the professional's income.
The withheld tax is declared by the paying party on the muhtasar and premium service return (the monthly combined withholding tax and social security return); the deadlines are listed in the tax calendar.