BSMV (Expenditure Tax Law)
5% tax is applied to Insurance Transactions pursuant to Article 33 (f) of the Expenditure Tax Law No. 6802.
According to the decision dated 12.8.1991 and numbered 91/2072 published in the Official Gazette dated 16.8.1991 and numbered 20962, the rate of BITT was determined as 5%. Such tax liability is borne by the insurance companies and as with the value added tax, this is an intermediate obligation and the tax is ultimately reflected on the beneficiaries of the services.
However, according to Article 29 of the same law, the following exceptions apply:
According to Article 31 of the Law, insurance companies can deduct the taxes for the insurance transactions they cancel (only part of the period after the date of cancellation) from the bank and insurance transactions tax calculated in the period of cancellation. Thus, deduction of cancelled BITT's is allowed in following periods. Taxes that cannot be deducted in the following period may be subject to a deduction in the returns of the following periods. 
YSV (Fire Insurance Tax)
According to Article 40 of Section 5 of the Municipal Revenues Law No. 2464, the premiums received for the fire insurances made for movable and real estate properties within the municipal boundaries and adjacent areas are subject to Fire Insurance Tax. The taxpayers are insurance companies.
The base of the Fire Insurance Tax is the amount of premiums received due to the fire insurance transactions and the Fire Insurance Tax rate to be paid over the determined base is 10%.
Assurance Account
The Assurance Account established by Article 14 of the Insurance Law No. 5684 is regulated by the Assurance Account Regulation published in the Official Gazette dated 26.7.2007 and numbered 26594.
The account's revenues are:
Traffic Services Development Fund
Traffic Services Development Fund was established by the Regulation on Traffic Services Development Fund published in the Official Gazette dated 19.07.1998 and numbered 23407. Financial Liability Insurance contribution amounting to 5 percent, which is collected pursuant to amended article 91 of the Highway Traffic Law No.2918, is transferred to this fund.
VAT and Stamp Tax
All insurance transactions are exempt from Value Added Tax and Stamp Tax.
In terms of wage earners:
Provided that the insurance or pension contract has been signed before an insurance or pension company located or with the head office located in Turkey, premiums paid by the service personnel for personal insurance policies such as life, death, accident, illness, disability, unemployment, motherhood, birth and collection of the person, spouse and young children of the wage earner and the contributions paid to the private pension system
The sum of the premiums, dues and contributions to be discounted cannot exceed 10 percent of the monthly salary when the payment is made (5 percent of the salary obtained in the month of payment for the premiums paid for private insurance policies other than the individual pension system) and the annual minimum wage annually.
For Employers (Personal Insurance Premium Payment on behalf of Employers' Employees):
The articles of the Income Tax Law, which regulate commercial earnings, do not accept personal insurance premiums paid by employers on behalf of their employees as expenses in the calculation of their commercial earnings. In addition, the Income Tax Law considers money or interests expressed in monetary value, which are provided by the employer to the employee as wage. For this reason, personal insurance premiums paid by employers are expensed as payment of wages by arranging a payroll on behalf of the employee. Here, employers record any additional costs incurred in payments that remain within legal limits (5 percent of gross wage) as expense without incurring any additional costs. However, since the premium payments exceeding the specified limits will be considered as net wage payments, they will be grossed up and added to the payroll in terms of the income tax and stamp tax and the employer will incur additional costs.
For Income Tax Payers Subject to Declaration:
Provided that they shall not exceed 10 percent of the declared income (5 percent of the declared income for individual insurance premiums other than the individual pension system) and annual amount of the minimum wage, individual insurance premiums such as life, death, accident, illness, disability, motherhood, maternity and education for the tax payer, his/her spouse and children under statutory age as well as the contributions paid for the individual pension system (If the spouses or children submit separate returns, premiums and contributions related to them are deducted from their own income provided that the insurance or pension contract has been signed before an insurance or pension company located or with the head office located in Turkey, that the premiums and contributions were paid in the year when the income has been generated and they have not been deducted separately during the calculation of net amount of the salaries of wage owners).
Corporate Tax Liability of Insurance Companies:
Corporate Tax Taxpayers are listed in article 1 of the Corporate Tax Law No. 5520. Accordingly, the economic enterprises and joint ventures of capital companies, cooperatives, economic public institutions, associations or foundations are corporate taxpayers. In this case, insurance companies, whether established as Joint Stock Company or cooperative status, are corporate taxpayers and their earnings during an accounting period are subject to Corporate Tax. Insurance companies that are subject to Corporate Tax due to their legal status are obliged to comply with the Corporate Tax Law and all related legal regulations in this respect.
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