What is depreciation?

A machine, a vehicle, or a computer isn’t expensed all at once in the year it’s bought. The business will use it for several years, so its cost is spread across those years, and that allocation is called depreciation. The idea is universal; the rules below are those of Turkish tax law.

Under Article 313 of the Tax Procedure Law (Vergi Usul Kanunu, VUK), real estate, tools, equipment, furniture, and fixtures that a business uses for more than a year and that are subject to wear, tear, or loss of value are depreciable. Vacant land and vacant plots are not (Article 314).

Tools, equipment, furniture, and fixtures whose value doesn’t exceed an amount set in the law can be expensed directly instead of being depreciated. That amount is updated by communiqué: the VUK text on mevzuat.gov.tr lists 12,000 TRY, effective January 1, 2026, under General Communiqué No. 588.

Depreciation methods

Under the straight-line method (normal amortisman), the asset is written off at the same rate every year, using rates the Ministry of Treasury and Finance publishes based on useful lives. The depreciation period is 1 divided by the rate, so an asset with a 20% rate is written off over 5 years.

A taxpayer can also choose a longer period, as long as it isn’t shorter than the useful life the Ministry publishes and doesn’t exceed twice that life or 50 years. Once chosen, the period can’t be changed.

Under the declining-balance method (azalan bakiyeler), depreciation is calculated each year on the remaining value. Only taxpayers who keep books on the balance-sheet basis can choose it. The rate is twice the straight-line rate, capped at 50%, and whatever value remains in the final year is written off that year.

An asset that started on straight-line can’t switch to declining balance, but one on declining balance can switch to straight-line. Depreciation is either deducted directly from the asset’s value or accumulated in a separate allowance account on the liabilities side (VUK Article 321).

When does depreciation start?

The depreciation period starts in the year the asset is placed on the balance sheet. Since a 2021 amendment by Law No. 7338, taxpayers can depreciate newly capitalized assets on a daily basis from the date they’re ready for use. Once adopted, the method can’t be abandoned.

For passenger cars owned by the business (other than those used for car rental or operation), depreciation in the first year covers only the months remaining in that year. Skipping depreciation in a given year doesn’t extend the period.

Under Article 40 of the Income Tax Law (Gelir Vergisi Kanunu, GVK), when a passenger car’s initial acquisition cost exceeds the limit set in the law, only the share of depreciation that corresponds to that limit is deductible. The limit in force on the date the car was acquired applies. Cars used for that purpose by businesses whose activity is renting out or operating passenger cars fall outside this limit.

Leasehold improvements (özel maliyet bedelleri) are written off in equal percentages over the lease term under VUK Article 327.

Depreciation in IWB

IWB calculates depreciation in the Fixed Assets module. You open an asset record for furniture and fixtures, machinery and equipment, vehicles, real estate, leasehold improvements, and intangible rights. Each record takes its asset, accumulated depreciation, and expense accounts from its asset category.

IWB applies the straight-line and declining-balance methods, daily depreciation for assets capitalized after October 26, 2021, and partial-year depreciation (kıst amortisman). In the final year, IWB writes off whatever amount remains.

When you select a period, IWB calculates its depreciation and shows the result line by line, by asset and by depreciation book. You can run it monthly or yearly, with monthly as the default. You can undo a run with a reversing entry; a reason is required.

Posting requires a separate permission, and Accounting creates the journal entry. The entry has lines for depreciation expense, non-deductible expenses (kanunen kabul edilmeyen gider, KKEG), and accumulated depreciation.

For passenger cars, IWB applies the annual cap and sets the excess share aside as KKEG. The cap that applies is the one for the year the car was placed on the balance sheet.