Establishing a sole proprietorship is simpler, less expensive, and faster than other types of companies. For this reason, it's a popular choice for those new to e-commerce-like businesses.
Documents Required to Establish a Sole Proprietorship
You can choose to work with a financial advisor to establish a sole proprietorship. They will provide you with detailed information regarding the required documents and payments. Furthermore, establishing a sole proprietorship is much faster than other types of companies. Depending on the density of the area, the necessary audits will be conducted and your legal entity will be registered within 1-2 business days . The required documents for company formation are:
-
Power of Attorney for Financial Advisor
-
Copy of title deed or lease contract
-
Copy of identity card
-
Passport photo
-
Signature declaration
-
Residence (can be obtained from e-Government)
-
Vehicle purchase receipt and registration (if applicable) For company formation, you must submit your current company address to the tax office. The company address can be a home, office, virtual office, or shop. If the property is rented, a copy of the lease agreement, and if you own it, a copy of the title deed, will be added to the file along with the contract you will execute with the financial advisor.
Cost of Establishing a Sole Proprietorship in 2024
The estimated expenses required for 2024 to establish a sole proprietorship are as follows:
-
Signature Declaration (Notary Approved): Approximately 250 - 450 TL (Varies according to the notary tariff.)
-
Financial Advisor Business Opening Fee: Average 1,500 - 3,000 TL (Varies depending on the advisor's service scope and regional differences.)
-
Tax Office Stamp Duties and Charges: Various stamp duties and notification fees that may arise during the opening process may vary between 300 - 600 TL in total.
-
Cash Register (If Required): Prices for new generation cash register devices (Credit Cards) may range from 5,000 TL to 15,000 TL or more, depending on the model.
-
Stamp: Average 50 - 150 TL
Costs are estimates, and it's important to consult your financial advisor for up-to-date and accurate information. Many documents (copy of ID card, residence permit, employment form, etc.) can be obtained free of charge through e-Government or from your personal documents.
Does a Sole Proprietorship Pay Rent Withholding Tax?
Withholding tax is a type of tax withheld on rental income. The withholding tax on the rental value of real estate rented as a business is generally 20% of the gross rental value. If a sole proprietorship pays business rent, it declares and pays withholding tax to the government. Withholding tax declarations and payments are made quarterly. If the business is privately owned or leased between companies (if the rental income is subject to Corporate Tax), this tax is not payable.
What are the expenses of a sole proprietorship?
Every taxpayer has specific filing and payment obligations. In this context, a taxpayer's annual tax items and payments are as follows:
-
VAT Declaration every month: Stamp duty 194.65 TL (for 2024)
-
Quarterly Withholding Tax and Premium Service Declaration: Stamp duty 194.65 TL (for 2024) (Given if there are employees or deductions such as rent withholding tax.)
-
Quarterly Income Provisional Tax Return: Stamp duty 300.75 TL (for 2024)
-
Annual Income Tax Return: Stamp duty 389.85 TL (for 2024)
Stamp duty amounts are current for 2024. These amounts are updated annually based on the revaluation rate. There will also be other operating expenses such as financial advisor fees, Bağkur premiums, invoice costs, and more.
Sole Proprietorship Income Tax Brackets 2024
Unlike other capital companies, tax calculations for sole proprietorships are divided into levels based on their income. Details of the tax brackets, which range from 15% to 40%, for 2024 are as follows:
-
Up to 110,000 TL: 15%
-
16,500 TL for 110,000 TL of 230,000 TL, more: 20%
-
40,500 TL for 230,000 TL of 580,000 TL, more: 27%
-
135,000 TL for 580,000 TL of 3,000,000 TL, more: 35%
-
982,000 TL for 3,000,000 TL of more than 3,000,000 TL, more: 4%
0
If you're reading this article considering establishing a sole proprietorship to launch an e-commerce venture and aren't yet fully prepared, please learn more from relevant sources. Get the infrastructure you need at affordable prices and ease your way through a challenging process.
