What is Turkish damga vergisi?
Damga Vergisi (Stamp Duty) is Turkey’s tax on documents and agreements, governed by 488 sayılı Damga Vergisi Kanunu (1964). Damga vergisi is levied either as a fixed amount or a percentage of the document’s “value” — typically the contract price, payment obligation, or guarantee amount. Almost any commercial document with a determinable monetary value can trigger damga vergisi: employment contracts, lease agreements, loan agreements, surety bonds, share transfer agreements, court judgments.
Common damga vergisi rates (current schedule)
- Standard contracts: 0.948% of contract value, with annual cap (recently around TRY 17M, updated each year).
- Employment contracts (open-ended): 0.759% on annual gross compensation (collected upfront for first year).
- Lease agreements: 0.189% on total lease consideration.
- Loan agreements: 0.948% on principal (with bank loans typically exempt — covered under BSMV instead).
- Surety/guarantee: 0.948% of guaranteed amount.
- Fixed-rate documents: e.g., authorisation documents, certain receipts.
Damga vergisi mechanics
- Mükellef: contract signatories are jointly liable; commonly stronger party pays in practice.
- Payment: via banking system (Damga Vergisi makbuzu) within 15 days of document signing.
- Annual cap: single document subject to maximum cap regardless of contract value.
- Common exemptions: agreements signed outside Turkey (with carve-outs for Turkey-effective documents), inter-bank loan agreements, certain export and incentive documents.
Stamp tax in deal practice
Damga vergisi changes how Turkish deals are papered. The tax attaches per signed paper containing a monetary commitment, with each copy historically taxed — hence the practice of single originals plus certified copies — and a per-document cap that resets annually. Standard planning is legitimate and expected: executing agreements with no stated monetary amount where commercially possible, structuring framework agreements so only order forms carry amounts, considering execution abroad for foreign-law contracts where the document will not be brought into Türkiye, and using exemptions where the legislator provided them — notably for qualifying technology-zone activities and certain financing documents. The diligence angle: unstamped contracts remain valid but trigger tax plus penalties when produced to authorities or courts — a contingent liability that sits quietly in every Turkish contract stack.