INTERNATIONAL TAX ADVISORY · TURKIYE
Hiring Developers in Turkey? Understand Your Corporate Tax Exposure.
Hiring a software engineer, product manager or customer success professional based in Türkiye does not automatically create a taxable presence. But the person’s authority, activities, working arrangements and the applicable tax treaty can change the analysis.
Request a CPA-Led Turkey Hiring Tax Risk Assessment. Email us or WhatsApp a CPA with your country of incorporation, number of customers in Turkey, the duties of your Turkey-based staff and your current contract model.
What we review
1. Permanent establishment (PE)
We assess fixed-place and dependent-agent exposure under Turkish domestic law and the relevant bilateral tax treaty. Contract signing authority, habitual commercial negotiations, premises and actual working practices matter more than job titles alone.
2. Contractor versus employee classification
We evaluate the practical working relationship, management and supervision, exclusivity, payment arrangements and potential Turkish payroll and social-security obligations. Contractor wording alone is not decisive.
3. Corporate tax residence and effective management
Where strategic and operational decisions are actually made can create a separate corporate residence issue, particularly for founder-led and distributed businesses.
4. Cross-border payments and documentation
We examine service contracts, invoices, withholding-tax questions, VAT treatment, treaty documentation and the evidence supporting the arrangement.
5. Turkish VAT on support delivered to customers in Turkey
Where a Turkey-based contractor, employee or EOR worker supports your customers in Turkey — technical support, onboarding, customer success or renewals — the service is generally used in Turkey and fails the VAT export test of VAT Law Art. 11/1-a and 12/2. We confirm whether each workstream is an exempt service export or a 20% domestic service, how invoices should be split and worded, and how past invoices should be corrected. See Should a Turkish contractor charge VAT to a US company?
Selling to customers in Turkey without a Turkish entity?
Our dedicated review for foreign companies serving Turkish customers covers VAT, permanent establishment and contractor risk together: Foreign Companies Serving Turkish Customers: VAT, PE & Contractor Risk →
Who this service is for
US SaaS companies using Turkish developers; UK and EU technology businesses engaging contractors; foreign employers with Turkish customer-facing staff; distributed teams whose founders or executives work from Türkiye; and companies deciding between direct contracting, employment, an employer of record or a Turkish subsidiary.
How the review works
- Initial fact finding: corporate structure, team roles, location and contract terms.
- Document and activity review: written agreements, actual authority, reporting lines, office arrangements and business workflows.
- Tax analysis: Turkish law, applicable treaty provisions and compliance implications.
- Decision-ready findings: risk assessment, assumptions, missing evidence and recommended actions.
Deliverables
Depending on the agreed scope: a written Turkish tax risk opinion, risk matrix, contractor/employment structure comparison, evidence checklist and practical remediation roadmap. Foreign-law advice is coordinated with qualified local advisers when required.
Frequently asked questions
Does one developer in Turkey create a PE?
Not automatically. The actual functions, place of work, business authority and treaty provisions determine the assessment.
Does using an independent contractor eliminate PE risk?
No. Labels are not conclusive; the economic and legal reality must be reviewed.
Is an employer of record always safer?
No. An EOR may address certain employment obligations, but does not by itself resolve every PE or corporate tax question.
Can the Turkish contractor benefit from a software or data-analysis export deduction?
Potentially, subject to a separate eligibility review under the relevant Turkish income-tax rules. It does not determine the foreign company’s PE status.
Request a Turkey Hiring Tax Risk Assessment
To obtain a scoped proposal, send us your company’s jurisdiction, number of Türkiye-based personnel, their duties and whether they work as employees or contractors. Contact Systems CPA.
General information only, not a legal or tax opinion on any particular facts.
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