Provisional Tax for the Self-Employed in Turkey: Setting the 15% Up Correctly in 2026 and Crediting the Withholding You Paid

TL;DR — the summary in 60 seconds

• Provisional tax = a flat 15%. The rate of the first income bracket of the tariff, not the progressive tariff, is applied to the whole of the earnings (GVK repeated Art. 120). It is not an extra tax but the prepaid part of the annual income tax.
• A quarterly rhythm. Filing by the 17th of the second month following the period, payment by the end of that month. Each period is computed on cumulative earnings, less what was paid for earlier periods.
• The 20% withholding is not lost. On an invoice issued to a company or business the payer withholds 20% (GVK Art. 94/2); that is income tax prepaid in your name and it is credited on the annual return.
• The year-end credit. The annual tax is computed under the progressive tariff; the provisional tax paid plus the withholding deducted come off it. Most self-employed taxpayers who are subject to withholding end up in a refund position.

Regulatory note. This article is based on the Income Tax Code No. 193 (repeated Art. 120, Art. 94, Art. 103) as it stands in July 2026. The provisional tax rate is, under GVK repeated Art. 120, the rate applied to the first income bracket of the tariff; the self-employment withholding rate is set by Presidential Decision under the power given by GVK Art. 94. Rates and thresholds change with revaluation and with new legislation; confirm the current communiqué before filing.

In a first meeting with a self-employed professional, the thing most often confused is the assumption that “provisional tax” and “annual income tax” are the same thing. They are not. Provisional tax is not a separate, additional burden; it is a prepaid part of the income tax you will pay at year end.

Set the mechanism up correctly and there is no year-end surprise. Set it up wrongly and you either tie up cash needlessly or miss the credit and pay more than you owe.

This article clears up the three questions on the desk of anyone changing advisers or starting a professional practice for the first time. How is provisional tax computed? Where does the withholding that was deducted go? And how does the picture close at year end?

Provisional Tax: Why a Single Rate Rather Than the Tariff?

Annual income tax is computed under a progressive tariff — as earnings grow, the bracket rate climbs from 15% up to 40%. Provisional tax works differently. Repeated Article 120 of the GVK says that provisional tax is computed by applying to the current-period earnings “the rate applied to the first income bracket of the tariff”. For 2026 that rate is 15%.

So provisional tax applies one flat rate to the whole of your earnings; it does not use the progressive tariff. The logic is that provisional tax is an estimate, an advance. The state takes part of your tax before the year ends but uses the lowest bracket rate so as not to take too much. The real, progressive computation is done at year end.

Example. Take a taxpayer with annual gross revenue of TRY 3,000,000 and deductible professional expenses of TRY 800,000. Net earnings = 3,000,000 − 800,000 = TRY 2,200,000. Through the year, provisional tax of 15% is paid quarterly on cumulative earnings; across the year that comes to roughly 2,200,000 × 15% = TRY 330,000.

The Period Calendar: a Quarterly Rhythm

Provisional tax is declared in quarterly periods. Each period is computed on the cumulative earnings up to that point; the provisional tax paid in earlier periods is deducted and the balance is paid. The return is filed by the 17th of the second month following the period and paid by the end of that month.

The practical result is four small “mini-returns” during the year. That stops you meeting one large tax bill in a single stroke at year end — the burden is spread across the calendar. But it demands discipline; a missed period brings late-payment interest and irregularity penalties into play.

To make the calendar concrete: the first period covers January-March earnings and is declared by the 17th of the second month following; the second period covers April-June, the third July-September, the fourth October-December.

In each period the total earnings to that date are recomputed — in the third period, for instance, the whole of the first nine months is taken as the base, the provisional tax of the two earlier periods is credited, and the balance is paid. Thanks to this cumulative logic, a swing in one period (a high-revenue quarter, say) is automatically balanced out in the next; each period does not start from zero.

The critical point for cash management is this: treat provisional tax not as a “tax expense” but as a fund being accumulated in advance for the year-end tax. Set up properly, the annual return most often produces a credit-and-refund picture rather than a further payment.

Withholding: the Tax Deducted Is Not Lost, It Is Credited

This is the point on which a self-employed professional should most be reassured. When you invoice a company or a business for your activity, the payer (as tax withholding agent) deducts withholding tax on the payment under Article 94 of the GVK. On self-employment payments that rate is 20%.

An important detail: the statute does not write that rate directly. GVK Article 94 makes withholding compulsory but leaves the power to set the rate to the President (formerly the Council of Ministers). The current rate on self-employment payments is applied as 20% by the relevant Decision.

The withholding deducted is income tax prepaid in your name. It is not lost. On your year-end return it is deducted (credited) from the income tax computed. For most self-employed taxpayers the withholding plus the provisional tax exceeds the annual tax — in which case the difference is refunded or offset against other tax debts.

There is a second subtlety here. When the same earnings are subject to both provisional tax and withholding, the total prepaid during the year can easily exceed the real annual tax. The fear of “paying twice” is therefore misplaced — provisional tax and withholding are advance instalments of the same single tax, arriving through different channels, and both come off at year end. What matters is that both are recorded correctly period by period; otherwise the right to the credit cannot in practice be used.

Gökay Gül’s note. The mistake I see most often in the field is a self-employed taxpayer treating the 20% withheld as a cost item, as though the money were gone. It is not — it is sitting at the tax office in your name. Entered on the return correctly, most taxpayers end the year with a refund rather than a payment. Collect your withholding statements (the letter from the deducting company, or the withholding-return details) month by month; trying to assemble them at year end is the number one reason the credit gets missed.

Year End: How the Picture Closes

Let us complete the example above. Net earnings TRY 2,200,000, with the whole activity subject to withholding (services supplied to a company):

As you can see: although the real annual tax is TRY 652,500, the provisional tax prepaid through the year and the withholding deducted exceed that figure, and the taxpayer moves into a refund position. Treating the withholding as money lost, and thinking of it as a cost, is the most common and most expensive misconception.

This table is the scenario in which the whole activity is subject to withholding. For a self-employed taxpayer whose end clients are natural persons (no withholding), the withholding line is zero; provisional tax is then the only prepayment item, and tax payable rather than a refund is the normal outcome.

Three Frequent Mistakes

1. Computing provisional tax with the tariff. Provisional tax is a flat 15%; the progressive tariff belongs to year end. Applying the tariff in a period return makes you overpay.

2. Forgetting to credit the withholding. If the 20% deducted is not entered on the annual return, the tax you prepaid cannot be recovered. Invoices and withholding statements must be kept complete.

3. Leaving expenses undocumented. Net earnings = gross revenue − documented professional expenses. Undocumented expenditure does not reduce the base; it inflates both the provisional tax and the annual tax.

Frequently Asked Questions

Are provisional tax and annual income tax paid separately? No, they are payments of the same tax at different times. The provisional tax you pay quarterly during the year is credited against the annual income tax computed at year end. If you have overpaid you receive a refund or an offset; there is no such thing as “tax twice”.

Do I pay provisional tax in a period in which I make a loss? No. Provisional tax is computed on the cumulative earnings of the current period. If the period is cumulatively in loss there is no base and no provisional tax arises. If earnings turn positive in a later period, that period’s cumulative earnings form the base.

My client is a natural person and no withholding is deducted; what changes? Withholding is deducted only on payments by companies and businesses that count as withholding agents. If your end clients are natural persons with no withholding obligation, the withholding line is zero. Provisional tax is then the only prepayment item and the year usually ends with tax payable rather than a refund — plan your cash accordingly.

What happens if I miss a provisional tax period? Late-payment interest and an irregularity penalty come into play for provisional tax not declared on time. And because provisional tax accrues in order to be credited against the annual return, a late or incomplete filing also disrupts your year-end credit position. Putting the period calendar in the diary is the cheapest insurance there is.

In Short

Tax in self-employment is a three-layer rhythm: a flat 15% provisional tax during the year (prepaid), 20% withholding on each payment (prepaid by the company), and the real tax computed under the progressive tariff at year end — with the first two credited against the third. Setting the mechanism up correctly is the key both to cash flow and to avoiding a year-end surprise.

Special situations — the copyright and creative-work exemption in GVK Art. 18, or foreign-source income — have their own rules and are worth checking case by case. You can look through the calculators on the tools page, read the wider picture in the SME tax guide, and get in touch if you would like to set up your filing and credit process together.