What is rental withholding and who pays it?
Withholding is tax deducted at payment on behalf of the recipient. An obligated tenant deducts it from gross rent, declares it and pays the landlord the net amount.
Rental withholding formulas
Gross to net
Withholding = gross × rate; net = gross − withholding.
Net to gross
Gross = net ÷ (1 − rate). At 20%, divide net rent by 0.80. Monthly withholding is multiplied by 12 for an annual total; annual input is not multiplied again.
Business rent withholding: a restaurant and cafe example
A cafe paying TRY 40,000 net monthly rent at 20% withholding has TRY 50,000 gross rent: TRY 40,000 to the landlord and TRY 10,000 withheld. Over 12 identical months, withholding totals TRY 120,000 and gross rent totals TRY 600,000.
For a net-rent agreement, the business cost includes both the landlord payment and withholding. Include gross rent in your opening budget and break-even calculation.
When is rental withholding not deducted?
Tenants taxed under the simple method do not withhold on rent. Rent paid to a corporate income taxpayer, except cooperatives, is generally outside rental income withholding.
Source: Corporate Tax General Communiqué No. 1, section 15.3.2.3. Date checked: 29 October 2026.
Confirm both parties’ tax status; the custom rate does not determine liability.
Rental withholding versus VAT withholding
Rental withholding is an income tax deduction from gross rent. VAT withholding assigns part of invoice VAT to the buyer. For invoices, use the VAT withholding calculator.