2025 Updated Guide

KKTC Income Tax Guide

Everything you need to know about Northern Cyprus income tax in one place - with interactive calculators, rates, and expert tips.

Showing tax rates and deductions for year 2025

Tax Rate

10-37%

Progressive

Basic Exemption

480,000 ₺

Annual

Filing Deadline

April 30

For previous year

Payment Due

July & Nov

2 installments

Northern Cyprus Income Tax Guide

A comprehensive guide to understanding and optimizing your tax position in KKTC.

Tax Rates & Deductions

Current tax brackets, personal deductions, and business expense guidelines for informed tax planning.

Tax Planning Tools

Practical examples, calculation formulas, and a year-end checklist to help manage your tax obligations.

Important Deadlines

Key filing dates and payment schedules to ensure compliance with Northern Cyprus tax requirements.

Income Categories

The tax law recognizes 8 different types of income, each with specific rules and potential deductions.

Employment Income

Salary, bonuses, benefits, severance pay (taxable portion).

Business Income

Sale of goods/services, e-commerce profits.

Professional Income

Lawyer, doctor, software developer, etc.

Agricultural Income

Agriculture & livestock revenue.

Real Estate Income

Rental income, property rights.

Property Sale Gains

Real estate sales with special exemptions.

Capital Income

Interest, dividends, repo transactions.

Other Income

Compensation, license fees, etc.

Personal Deduction Table (2025)

Understanding available deductions is essential for tax optimization. Below are the deductions available for 2025.

Deduction Rate Annual (TL) Description
Basic (taxpayer) Fixed 480,000 ₺ Automatically applied
Special Deduction (On Net Income) (A) 10.00% - For employees and lump-sum taxation
Special Deduction (On Net Income) (B) 10.00% - For others not mentioned above
Spouse Deduction (A) 8.00% 38,400 ₺ For spouse living together
Spouse Deduction (B) 4.00% 19,200 ₺ Alimony paid to divorced spouse
Child Deduction (A) 6.00% 28,800 ₺ Children under 16 not in education, in primary education, or unmarried daughters without income
Child Deduction (B) 8.00% 38,400 ₺ Children under 20 in secondary education in TRNC, in military service (except reserve officer), under 18 in secondary education outside TRNC, permanently disabled
Child Deduction (C) 11.00% 52,800 ₺ Children aged 18-27 in higher education
Child Deduction (D)(i) 15.00% - For the third child
Child Deduction (D)(ii) 5.00% - For each additional child (cumulative)
Disability and Old Age Deduction (A) 15.00% 72,000 ₺ For those who have lost at least 50% of their working capacity
Disability and Old Age Deduction (A) 30.00% 144,000 ₺ For those who have lost 100% of their working capacity
Disability and Old Age Deduction (B) 5.00% 24,000 ₺ For taxpayers aged 65 and above
Social Security Expenses 19.00% - Employer contribution
Social Security Expenses 13.00% - Employee contribution
Other Expenses (1) - Amount paid in relevant year Municipal Professional Tax
Other Expenses (2) - Amount paid in relevant year Municipal Professional Tax

* Note: After all expenses, exemptions and social security contributions are deducted.

** Child deductions: If spouses have separate incomes, child deductions are divided equally between spouses.

Income Tax Rates (2025)

The KKTC uses a progressive tax system with increasing rates for higher income brackets.

Annual

%10.00 Rate
Tax Base: 45,000 ₺
Cumulative Base: 45,000 ₺
Bracket Tax: 4,500 ₺
Cumulative Tax: 4,500 ₺
%20.00 Rate
Tax Base: 45,000 ₺
Cumulative Base: 90,000 ₺
Bracket Tax: 9,000 ₺
Cumulative Tax: 13,500 ₺
%25.00 Rate
Tax Base: 120,000 ₺
Cumulative Base: 210,000 ₺
Bracket Tax: 30,000 ₺
Cumulative Tax: 43,500 ₺
%30.00 Rate
Tax Base: 190,000 ₺
Cumulative Base: 400,000 ₺
Bracket Tax: 57,000 ₺
Cumulative Tax: 100,500 ₺
%37.00 Rate
Tax Base: 0 ₺
Cumulative Base: 400,000+ ₺

Annual Personal Exemption: 480,000 ₺

Monthly (12 Salaries)

%10.00 Rate
Tax Base: 3,750.00 ₺
Cumulative Base: 3,750.00 ₺
Bracket Tax: 375.00 ₺
Cumulative Tax: 375.00 ₺
%20.00 Rate
Tax Base: 3,750.00 ₺
Cumulative Base: 7,500.00 ₺
Bracket Tax: 750.00 ₺
Cumulative Tax: 1,125.00 ₺
%25.00 Rate
Tax Base: 10,000.00 ₺
Cumulative Base: 17,500.00 ₺
Bracket Tax: 2,500.00 ₺
Cumulative Tax: 3,625.00 ₺
%30.00 Rate
Tax Base: 15,833.33 ₺
Cumulative Base: 33,333.33 ₺
Bracket Tax: 4,750.00 ₺
Cumulative Tax: 8,375.00 ₺
%37.00 Rate
Tax Base: 0.00 ₺
Cumulative Base: 33,333.33+ ₺

Monthly Personal Exemption: 40,000.00 ₺

Monthly (13 Salaries)

%10.00 Rate
Tax Base: 3,461.54 ₺
Cumulative Base: 3,461.54 ₺
Bracket Tax: 346.15 ₺
Cumulative Tax: 346.15 ₺
%20.00 Rate
Tax Base: 3,461.54 ₺
Cumulative Base: 6,923.08 ₺
Bracket Tax: 692.31 ₺
Cumulative Tax: 1,038.46 ₺
%25.00 Rate
Tax Base: 9,230.77 ₺
Cumulative Base: 16,153.85 ₺
Bracket Tax: 2,307.69 ₺
Cumulative Tax: 3,346.15 ₺
%30.00 Rate
Tax Base: 14,615.38 ₺
Cumulative Base: 30,769.23 ₺
Bracket Tax: 4,384.61 ₺
Cumulative Tax: 7,730.77 ₺
%37.00 Rate
Tax Base: 0.00 ₺
Cumulative Base: 30,769.23+ ₺

Monthly Personal Exemption: 36,923.08 ₺

Deductible Business Expenses for Sole Traders

Essential expenses you can deduct from business income

Personal expenses CANNOT be deducted - keep business and personal separate

Sponsorship & Donations

Up to 10% of net profit

Requirement: To state organizations, sports clubs, approved charities

Education, health, culture, sports, science only

Representation & Entertainment

Manufacturing/export: 4% of gross income, Others: 2%

Requirement: Business entertainment and representation costs

Cannot exceed percentage limits, cannot be carried forward

Asset Depreciation

As per Tax Procedure Law rates

Requirement: Business equipment, machinery, vehicles (1600cc max)

Includes office equipment, computers, furniture

Operating Expenses

100% of business costs

Requirement: Rent, utilities, phone, internet, insurance

Must be exclusively for business use

Employee Costs

Full deduction including benefits

Requirement: Salaries, SSI contributions, meal/transport allowances

Must be properly documented with payrolls

Finance Costs

Interest on business loans

Requirement: Loans must be for business purposes

Stock purchases, equipment finance, working capital

Non-deductible: Personal withdrawals, family salaries (unless working), home-work commute, personal rent

Year-End Tax Planning Checklist

Essential tasks to optimize your tax position before year-end

Document Collection

  • Gather all income statements
  • Collect business expense receipts
  • Update family status documents
  • Medical and disability certificates

Deduction Verification

  • Verify spouse employment status
  • Update children education status
  • Calculate social security contributions
  • Review special deduction eligibility

Tax Optimization

  • Review income/expense timing
  • Carry forward applicable losses
  • Maximize deductible donations
  • Review asset depreciation

Filing Preparation

  • Schedule accountant appointment
  • Organize financial records
  • Plan tax payment schedule
  • Mark filing deadlines

Complete these tasks before December 31st to maximize your tax benefits for the current year.

Tax Calculation Examples for 2025

Practical examples demonstrating tax calculations for common scenarios.

Scenario A — Single, No Children

1,000,000 ₺ gross annual income

Gross income: 1,000,000 ₺
Social Security Expenses (13%) -130,000 ₺
After Social Security 870,000 ₺
− Personal deduction: -480,000 ₺
Special Deduction (10%) -87,000 ₺
= Tax base: 303,000 ₺

Tax calculation:

  • 0−45,000 × 10% 4,500 ₺
  • 45,000−90,000 × 20% 9,000 ₺
  • 90,000−210,000 × 25% 30,000 ₺
  • 210,000−400,000 × 30% 600 ₺
Total tax: 44,100 ₺

Scenario B — Married, Non-working Spouse + 2 Children

Same 1,000,000 ₺ gross annual income

Gross income: 1,000,000 ₺
Social Security Expenses (13%) -130,000 ₺
After Social Security 870,000 ₺

Personal deductions:

  • Basic 480,000 ₺
  • Spouse 38,400 ₺
  • Child 1 (Secondary education) 38,400 ₺
  • Child 2 (University) 52,800 ₺
Special Deduction (10%) -87,000 ₺
− Total deductions: 696,600 ₺
= Tax base: 173,400 ₺

Tax calculation:

  • First 210,000 ₺ (per brackets) 13,500 ₺
  • 210,000−290,400 × 30% 7,272 ₺
Total tax: 20,772 ₺

Tax Calendar and Payment Deadlines

Important deadlines for tax filing and payments to maintain compliance with KKTC tax law.

Annual Filing & Payment Deadlines

Annual Tax Return Filing

  • April 30 - Standard filing deadline for previous year
  • 4 months after year-end - Non-calendar year businesses
  • 1 month before departure - Leaving the country

Income Tax Payment Schedule

  • 2 equal payments: July 31 and November 30
  • Monthly plan: Equal monthly amounts through December
  • If disputed: Undisputed portion per schedule, balance 1 month after resolution

Penalty Structure

Late Payment Penalties

Monthly late interest on unpaid amounts

Plus potential tax evasion penalties for willful non-payment

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