The pension system offers you a three step tax advantage. Join the system now and start saving by benefiting from tax advantages!
1ST STEP: Taxation of Pension Investment Fund
Pension investment funds portfolio management incomes are exempt from Income and Corporate Tax.
Example Implementation 1
| |
Pension Investment Fund |
Other |
| Repo Amount |
100.000 |
100.000 |
| Repo Yield |
10.000 |
10.000 |
| Deduction of withholding paid |
- |
10.000 x 15% =1.500 |
| Principal + Yield |
110.000 |
108.500 |
2ND STEP: Taxation of Acquired Savings
The profit and savings acquired from the Pension System are explained according to their type of separation and period in the table below.
| Situation |
Exemption |
Income Tax Withholding |
| Persons who have remained in the system for 10 years and reached the age of 56 |
25% |
5% |
| Persons who have left the system due to obligatory situations such as death, disability |
25% |
5% |
| Persons who have paid contributions within the system for 10 years but who have left the system before reaching the age of 56 |
- |
10% |
| Persons who have left the system without paying contributions for 10 years |
- |
15% |
3RD STEP: The Deduction of the Paid Contributions from the Tax Base
Employees
Paid Employees may deduct the contribution amounts they pay to the pension system on behalf of their self and/or their spouse from the income tax base on condition that it does not exceed 10 % of their monthly gross salary and the annual amount of their gross minimum salary yearly.
Example Implementation 2
| Monthly Gross Salary |
TL 2.000 |
| Maximum Contribution Amount To be Deducted from Tax Base (Gross Salary x 10%) |
TL 200 |
| Annual Limit |
Annual gross minimum salary |
| New Income Tax Base |
2.000 – 200 = TL 1.800 * |
| Tax Rate (if 25%) Income Tax Payable |
1.800 x 25% = TL 450 |
| Income Tax payable on Condition that Contribution is not Paid |
2.000 x 25% = TL 500 |
| Tax Advantage |
500 – 450 = TL 50 ** |
* As your income tax base shall decrease, the income tax you shall pay will decrease too.
** By the deduction of the contribution amount from the income tax base, TL 50 of the TL 200 you deposit to your pension account shall be returned to you as a tax advantage. Thus the real cost of the contribution amount you deposit will be TL 150.
Self-Employed
The self-employed may deduct the contribution amounts they pay to the pension system on behalf of their self and/or their spouse from the income tax base on condition that it does not exceed 10 % of their monthly gross salary and the annual amount of their gross minimum salary yearly.
Example Implementation 3
| Annually declared Income |
TL 20.000 |
| Maximum Contribution Amount To be Deducted from Tax Base (Gross Salary x 10%) |
TL 2.000 |
| Annual Limit |
Annual gross minimum salary |
| New Income Tax Base |
20.000 – 2.000 = TL 18.000 * |
| Tax Rate (if 25%) Income Tax Payable |
18.000 x 25% = TL 4.500 |
| Income Tax Payable on Condition that Contribution is not Paid |
20.000 x25 % = TL 5.000 |
| Tax Advantage |
5.000 – 4.500 = TL 500 ** |
* As your income tax base shall decrease, the income tax you shall pay will decrease too.
** By the deduction of the contribution amount from the income tax base, TL 500 of the TL 2.000 you deposit to your pension account shall be returned to you as a tax advantage. Thus the real cost of the contribution amount you deposit will be TL 1.500
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