Income Tax Rates and Bracket Changes for 2025 Unveiled
The income tax rates and exemption amounts for the year 2025 have been published in the Official Gazette. With the new regulations, the first income bracket has increased to 158,000 lira, and the tax advantages provided for individuals with disabilities and employees have been expanded.
Income tax rates and bracket changes With the communiqué announced by the Ministry of Treasury and Finance, the income tax rates for 2025 have been revised. Accordingly, the first income bracket has increased from 110,000 lira to 158,000 lira, while the second bracket has risen from 230,000 lira to 330,000 lira, and the third bracket has been increased from 580,000 lira to 800,000 lira. The highest bracket, recognized as the upper tier, has been raised from 3 million lira to 4 million 300 thousand lira.
For those earning wage income, the increase of the third income bracket from 870,000 lira to 1 million 200,000 lira allows taxpayers to reach higher brackets later, enabling them to pay taxes at lower rates. The new regulations aim to relieve potential financial burdens on taxpayers by expanding the tax brackets.
Tax advantages for minimum wage earners and employees The 30% increase in the minimum wage has also resulted in a similar increase in income and stamp tax exemptions. Throughout 2025, all employees will be exempt from a total of 47,519.79 TL in income and stamp tax payments. This situation provides a significant financial advantage, especially for low-income workers.
The exemption amounts for daily meal and travel allowances have also been increased. The daily meal allowance exemption has risen from 170 TL to 240 TL, while the travel allowance exemption has increased from 88 TL to 126 TL. These changes allow for a larger portion of meal and travel assistance provided by employers to be tax-exempt.
Tax reductions for individuals with disabilities Income tax reduction amounts for individuals with disabilities have been updated with an increase in the revaluation rate. Monthly reduction amounts based on the degree of disability have been set as follows: for the first degree, from 2,400 TL to 5,700 TL; for the second degree, from 4,000 TL to 9,900 TL; for the third-degree individuals, the amount has been updated from 6,900 TL to 9,900 TL.
Additionally, the excise tax exemption amount for vehicles used by individuals with disabilities has been increased to 2 million 290 thousand 200 TL at the start of the year. These regulations aim to reduce the tax burdens on individuals with disabilities and improve their quality of life.
Innovations in rental, incidental, and capital gains The tax exemption amount applied to rental income has increased from 33,000 TL to 47,000 TL. This increase provides tenants with more comprehensive tax advantages. The exemption amount for capital gains has been raised to 120,000 TL, while the exemption amount for incidental gains has been increased from 200,000 TL to 280,000 TL.
The declaration threshold has also been set at 18,000 TL, making it mandatory to file a declaration for incomes exceeding this amount. The regulations aim to increase the tax advantages provided to taxpayers across various types of income.
Changes in passenger vehicle expenses The expense and depreciation amounts related to passenger cars have been updated according to the revaluation rate. The monthly rental fee has been raised from 26,000 TL to 37,000 TL, while the limit for deducting expenses through depreciation has increased from 1 million 500 thousand TL to 2 million 100 thousand TL.
These new regulations aim to expand the tax advantages provided to vehicle users while ensuring flexibility in the calculation of depreciation and rental expenses.
Changes in inheritance and transfer tax The exemption amounts for inheritance and transfer tax have also been updated and increased. The exemption amount applied for spouses and children in cases of inheritance has been raised from 1 million 609 thousand lira to 2 million 316 thousand lira, while the exemption amount for gratuitous transfers and bonuses has increased from 37 thousand 59 lira to 53 thousand 339 lira.
These changes ensure a broader exemption from tax for income obtained through inheritance, while the new rates aim to alleviate tax liabilities.