In withholding, the person who owns the income and the person obliged to deduct the tax and pay it to the tax office are often different. In the case of wages, the employee is the income tax taxpayer, while the employer may be the person responsible for the tax. For commercial property rent as well, the income tax of the landlord must be distinguished from the duties of the tenant whom the law obliges to withhold. A clause in the contract stating that all taxes belong to the other party does not, on its own, change the statutory liability toward the tax authority.
In a dispute, the first question is whether the person making the payment is obliged to withhold. Next, the type of the payment, its gross amount, the time of withholding, and the status of filing and payment are determined. Not withholding at all, not declaring the tax that was withheld, and not paying the tax that was declared are not the same legal event.
The difference between the taxpayer and the person responsible for the tax
Article 8 of the Tax Procedure Law (VUK) distinguishes the taxpayer, to whom the tax debt belongs, from the person responsible for the tax (vergi sorumlusu), who is the counterparty of the authority for payment of the tax. Under VUK Article 11, the person obliged to withhold tax is responsible for the withholding being made in full, for its payment, and for performing the related duties. That the income belongs to another person does not remove this obligation.
The person obliged to withhold is determined by evaluating together the persons and payments listed in Article 94 of the Income Tax Law (GVK). Not every person who makes a payment is automatically a person responsible for the tax. The status of the recipient as a taxpayer also matters; the same economic payment may be subject to different provisions when made to different persons or institutions.
Can liability for withholding be transferred by contract?
The parties may allocate the economic burden between themselves. However, the taxpayer status and liability set by tax laws cannot, apart from statutory exceptions, be changed toward the authority by a private contract. A clause such as “the owner will pay the tax” does not by itself remove the filing and payment duties of a tenant who is statutorily obliged to withhold.
Whether the person responsible for the tax can seek recourse against the principal taxpayer is a separate matter. VUK Article 11 does not remove this right; however, the specific contract, the net/gross arrangement for the wage or rent, and the legal basis of the payment affect the outcome of a private-law claim. It cannot be assumed in advance that the tax, the penalty and all ancillary receivables can be passed on to the other party in full.
Who is liable for withholding on wage payments?
The definition of wages is in GVK Article 61, and the withholding provisions concerning taxation start at Article 94 and following. Where the statutory conditions exist, the employer withholds tax from wages and reports it with the relevant return. The payroll, the bank payment and the return should be consistent with one another. The net amount received by the employee and the base on which the tax is calculated are not the same.
Withholding on wages is not a fixed 20 percent for all employees. The tariff of the relevant period, the formation of the tax base and the applicable exemptions are taken into account. The minimum wage exemption, fringe payments, multiple employers and other benefits in the nature of wages require separate evaluation. The calculation applied to one employee should not be carried over to another without documents.
If the employer does not pay the tax, will the employee be charged again?
The employer’s breach of the statutory duty to withhold and pay does not, in every case, automatically justify charging the same withholding debt to the employee again. Whether withholding was actually made, the payroll and payment records, whether the income is subject to an annual return, and the offsetting rules are examined together.
On the other hand, the fact that tax was withheld from wages does not mean the employee will never file an annual return. A separate obligation may arise from wages from more than one employer or from the filing conditions of the relevant year. The employer’s tax liability and the employee’s own filing duty are two different assessments.
Does the tenant pay the withholding on commercial rent?
Where a person or institution obliged to withhold under GVK Article 94 rents property belonging to a natural person that generates income from immovable capital (gayrimenkul sermaye iradı), a 20 percent withholding is generally made on the gross rent. It matters that the rent is paid for a business premises; however, the name of the premises alone is not enough. The status of the payer and the nature of the landlord’s income are determined together.
An ordinary natural person who rents a residence for personal needs and is not obliged to withhold does not become a withholding agent merely by being a tenant. By contrast, in different relationships, such as a rental made by an employer for an employee, the person who actually makes the payment and the parties to the contract must be examined separately.
If the landlord is a company and the rent is set as a net amount
The fact that the property is among the assets of a commercial enterprise or that the landlord is a company may change the nature of the income and the provisions to be applied. The 20 percent rule for a natural person’s commercial rent is not automatically carried over to an ordinary company lease. Cooperatives, non-resident taxpayers and special regulations require a separate check.
Hypothetically, if in a lease subject to 20 percent withholding it has been agreed that the owner will be paid a net 100,000 TL, the gross amount is 100,000 / 0.80 = 125,000 TL; the withholding is 25,000 TL. If the contract provides a gross rent of 100,000 TL, the withholding is 20,000 TL and the net amount payable to the owner is 80,000 TL. Confusing net and gross wording may lead to under-withholding.
When does the withholding obligation arise?
GVK Articles 94 and 96 contain the distinction between payment in cash and payment by account. The fact that no money has left the bank does not mean in every case that the withholding obligation has not arisen. The nature of the entries that make the income payable on behalf of the right holder and the debiting entry must be examined. Advances and prepayments may also be evaluated under the relevant provisions.
For example, where the rent for future months is paid in advance, it should not be assumed that withholding will be made only when the relevant month arrives. Conversely, in a case where there is no payment in cash or by account at all, the same result is not reached merely by looking at the existence of a lease. A discussion about market rent or declaration may arise separately for the landlord.
Failure to withhold and failure to pay the tax
If a payment subject to withholding was made but no tax was calculated at all, the authority may act by determining the amount that should have been withheld and the period. If the tax was not accrued on time because the filing was deficient, tax loss (vergi ziyaı) and other sanctions come into play, subject to their conditions. The actual existence of the income and of the withholding obligation must first be proven.
If tax was withheld but not declared, the explanation that “the money was already taken from the employee or landlord” does not release the responsible person. Reporting the withheld tax to the authority and paying it are separate duties. Failure to pay is evaluated together with the returns and the accounting records.
Tax that is declared but not paid
If the tax was declared on time and correctly and accrued, but was not paid on its due date, mere delay in payment is not automatically, in every case, tax loss within the meaning of VUK Article 341. At the collection stage, late payment surcharges (gecikme zammı) and enforcement actions under Law No. 6183 may come into play. If there is an incomplete or untrue declaration, the assessment changes.
| Situation | Priority review | Likely area of action |
|---|---|---|
| No withholding was made | Type of payment, person obliged and tax base | Tax assessment and, if conditions are met, penalty |
| Withheld but not declared | Payroll, bank and return | Incomplete declaration and tax loss |
| Declared, not paid | Accrual, due date and payment | Collection and late payment surcharge |
| Excess withholding was made | Rate, exemption and net/gross amount | Correction, offsetting or refund |
Tax penalty and the position of the company manager
The addressee and the cause of a penalty are determined by which duty was breached by whom. That a company is a person responsible for withholding does not mean that a personal debt can be imposed on the company manager at the same time and without any further conditions. The tax liability and the liability of a statutory representative for a company’s debt rest on different provisions.
Where a payment order has been issued in the name of a statutory representative or a shareholder, the term of office, the power of representation, the nature of the debt and the conditions for collection from the company are examined separately. This assessment is made within the framework of VUK Article 10 and the relevant collection provisions. Merely signing the payroll or following the accounting work should not be read as satisfying all the conditions of personal liability.
Litigation and refund routes in a withholding dispute
An action against a notice issued in the name of the person responsible for the tax and a claim by the employee or the landlord of excess withholding are not the same procedure. The general time limit for suing against a notice is 30 days from the day following service, unless there is a special provision. For a payment order, the 15-day period in Article 58 of Law No. 6183 and the special grounds of objection are taken into account.
For an objection to an assessment made on the basis of a person’s own return, VUK Article 378 and the requirements of a reservation of rights (ihtirazî kayıt) are important. If there is a tax error, correction and, where necessary, the complaint route may be considered; not every difference of legal opinion counts as a tax error. Making an application does not by itself protect all litigation time limits.
In offsetting or refund, the rules relating to the type of income apply. The payroll, the rent statement and the filing records showing that the withholding was made should be prepared. The withholding agent’s breach of the duty to pay and the conditions of the income owner’s right to offset are not the same issue; the authority’s grounds for refusal are also reviewed separately. The competent court for a contractual claim against the employer or tenant is determined by the nature of the relationship; not every claim is taken to the tax court.
Related articles: Liability of a Company Manager and Statutory Representative for Tax Debts; Objection to a Tax Payment Order: Annulment Action, Time Limits and Stay of Execution; Objection to a Tax and Penalty Notice: Annulment Action, Time Limits and Evidence; Repentance and Amendment in Tax: Conditions, Correcting a Return and Risks of Loss of Rights.
Conclusion
To find the right addressee in withholding, the owner of the income, the person obliged to withhold and, where relevant, the liability of the company representative should be examined separately. Once the type of payment, the net/gross amount, the filing and the collection stage are determined, the right defense can be built. By evaluating the contract, payroll, rent records and notifications together, the appropriate route can be chosen for the tax assessment, penalty, refund or private-law claim.
Frequently Asked Questions
If the contract says the owner pays the withholding, is the tenant released?
As explained in the section on the difference between the taxpayer and the person responsible for the tax, a private agreement does not on its own remove the statutory duty to withhold toward the authority. Related explanation
Is wage withholding 20 percent for every employee?
As in the section on who is liable for withholding on wage payments, no. The relevant tariff, tax base and exemptions apply; there is no single fixed rate for wages. Related explanation
If a declared tax is not paid, will a tax loss penalty necessarily be imposed?
As explained in the section on failure to withhold and failure to pay the tax, mere delay in payment must be distinguished from deficient accrual. The collection of a correctly accrued debt is subject to separate rules. Related explanation
Is a company’s withholding debt demanded directly from the manager?
As in the section on tax penalty and the position of the company manager, the statutory conditions for personal pursuit are examined separately. The company’s withholding obligation alone is not sufficient. Related explanation
Sources
- Tax Procedure Law No. 213, Articles 8, 10, 11, 116–126, 341, 344 and 378: Source text
- Income Tax Law No. 193, Articles 23, 61, 63, 86, 94, 96, 98, 98/A, 103, 119 and 121: Source text
- Turkish Revenue Administration (GIB), 2026 Rental Income Tax Guide, section on withholding on rent payments: Source text
- Administrative Procedure Law No. 2577, Articles 7 and 27: Source text
- Law No. 6183 on the Procedure for Collection of Public Receivables, Articles 51, 55, 58 and repeated Article 35: Source text