Employee or independent service provider?
Who decides working hours and methods, supplies equipment and bears commercial risk? Can the individual serve several customers? These questions help determine whether the relationship generates employment, professional or business income.
Appearing on a foreign company's payroll does not automatically resolve obligations in Turkey. Permanent representative, permanent establishment and social security agreement issues need separate examination.
Four essentials for independent work
Establish tax registration, the correct document system, bank collection and expense documentation together. Record exchange differences between foreign-currency invoice and collection dates as well.
Even when the customer is overseas, the VAT exemption requires an assessment of overseas use. Work supporting a Turkish operation or customer may be treated differently even if payment comes from abroad.
Read the contract through a tax lens
The contract should clearly address gross or net compensation, foreign withholding, intellectual property, expense reimbursement, exchange rates and bank charges. A sentence saying 'all taxes are the worker's responsibility' does not resolve every uncertainty.
Estimating income and tax monthly rather than waiting for the annual return improves cash management. People receiving regular foreign-currency income may keep a tax reserve in a separate account.