GSL / Foreign Companies Audit / Audit Turkey

Turkish company audit, financial statements, accounting, consulting in the Turkey

Turkey is a state at the junction of Europe and Asia, historically and geographically connecting international trade routes. Turkey’s economy is attractive to foreign investors in various sectors: industry, transport, agriculture, tourism. Companies are not required to file financial statements with the state authorities; there is an obligation to file tax returns. Auditing is mandatory only for companies that exceed certain criteria in terms of annual turnover, assets and average number of employees. It is possible to open a company in one of Turkey’s 20 Free Economic Zones.

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Service packages Legislation Tax System Audit Services
Keeping the company's accounting records

Maintaining a systematic archive of company documents and providing them to the client upon request (depending on the type of work and the qualifications of the person employed)

USD 100-400 per hour USD
Preparation and submission of accounts, audit

(Depending on the type of work and the qualifications of the person employed)

USD 100-400 per hour
Apostille of financial statements (if necessary)
from 970 USD
Preparation and submission of a tax return

(depending on the type of work and the qualifications of the person employed)

USD 100-400 per hour
Registration of a company for VAT
from 1 100 USD
Tax advice on VAT-related and other matters
USD 300 per hour
Any additional services at the client’s request
USD 200 per hour USD

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General requirements - which companies should submit financial statements and reports

Accounting records in Turkey are regulated by the New Commercial Code. Resident companies and Turkish branches of foreign companies are obliged to keep accounting records and financial statements or consolidated financial statements in accordance with Turkish Financial Reporting Standards (TFRS).

Turkish Financial Reporting Standards (TFRS) fully comply with International Financial Reporting Standards (IFRS).

Financial statements should include general reports:

· Director’s report

· Balance sheet

· Profit and loss statement

· Statement of cash flow

· Statement of changes in equity

· Notes to the financial statements

Accounting records in official books should be kept in Turkish language.

Turkish lira (TRY) is used as a currency in official books. The records might be kept in a foreign currency, but should also contain equivalent numbers in TRY.

According to the tax procedural legislation of Turkey accounting records – Trade ledger, Inventory ledger and General Ledger – should be kept for five years starting from the last accounting period. According to the New Commercial Code and social security system requirements they should be kept for ten years.

Besides Turkey has 21 Free economic zones (FEZ). Company’s activity in FEZ is regulated by the Law on Free Economic Zones 3218.

If investor wishes to stat a company in FEZ he should choose a type of activity from the list of available ones.

There is a certain list of allowed types of activities for each free zone: trade, production, textile industry, software development, food industry, leather goods, pharmaceuticals and others.

Free economic zones of Turkey

Free zone
Type of activity
AGEAN FREE ZONE
Technological production
ANTALYA FREE ZONE
Yacht production, trade
EUROPEAN FREE ZONE
Textile industry
ISTANBUL FREE ZONE TUZLA
Manufacture of leather goods and trade
İZMIR MENEMEN LEATHER
Manufacture of leather goods and trade
ISTANBUL TRAKYA FREE ZONE
Premises for rent, warehouses
IZMIR FREE ZONE
Manufacture of leather goods and trade
KAYSERI FREE ZONE
Industrial production
İSTANBUL ATATURK AIRPORT
Airway trade, Software development
MERSİN FREE ZONE
Trade
TRABZON FREE ZONE
Trade, premises for rent, warehouses
ADANA-YUMURTALIK FREE ZONE
Heavy industrial production, petrochemicals, iron and steel industry, shipyard
TUBITAK MAM FREE ZONE
Research and development
DENIZLI FREE ZONE
Industry
SAMSUN FREE ZONE
Premises for rent, warehouses
RIZE FREE ZONE
Premises for rent, warehouses
EAST ANATOLIAN FREE ZONE
Trade
MARDIN FREE ZONE
Trade, manufacture
GAZIANTEP FREE ZONE
Premises and land for rent
BURSA FREE ZONE
Industry, manufacture
EAST ANATOLIAN FREE ZONE
Trade

As usual Free Economic Zones are located in port areas with access to the main trade routes. The advantages of doing business in free economic zone can be the following:

  • no corporate income tax
  • no value added tax VAT
  • no customs duties
  • other exemptions in relation to the law of a particular free zone

Audit of financial statements

If a company or a group of companies meets two out of the three stated below conditions then it is a subject to a mandatory audit

  1. Total assets exceed 35 000 000 TRY;
  2. Annual net sales volume exceeds 70 000 000 TRY;
  3. Number of employees exceeds 175 people.

In case two of these three aforesaid criteria are consecutively overstepped during two fiscal periods, the company is a subject to mandatory audit starting from the next fiscal year.

The following companies are subject to mandatory audit as well:

The following companies are subject to mandatory audit as well:

  • Companies under supervision of Capital Markets Board of Turkey;
  • Companies under supervision of the Banking Regulation and Supervision Authority (BRSA);
  • Insurance, reinsurance and pension companies;
  • Institutions authorized by the Istanbul Gold Exchange, intermediary institutions for precious metals;
  • Joint-stock companies engaged in production and trade of precious metals;
  • Joint-stock companies with license for storage of agricultural products
  • Companies incorporated as joint-stock companies under the regulations of the Law on public shopping centers;
  • Media companies – owners of national terrestrial,satellite and cable TV.

Terms of preparations and submission of financial statements and tax returns

Turkish companies are obliged to prepare financial statements and present them annually on annual meetings of shareholders during 3 months from the end of the fiscal year. There is no need to submit financial statements to state authorities. Only tax reruns should be submitted.

Public companies are obliged to submit financial statements. All public companies must prepare and submit financial statements 4 times a year.

Corporate income tax returns must be filed to tax authorities between 1st and 25th day of the forth month following each fiscal year. Payments for corporate income tax should be made till the end of the month, in which the tax return was filed.

Liability for the delay

If tax return was filed after the expiration of the terms sated above but before the tax audit, then the penalty is 50% of the amount of the lost tax. If tax return is filed later, then the penalty increases.

Consolidated financial statements

The Mother company is obliged to submit consolidated financial statements.

There is no need to prepare consolidated financial statements if the mother company is a branch of another Mother company.

Each company in the group should submit its own corporate tax return.

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