Turkish tax legislation falls under three headings: income taxes, taxes on expenditure and taxes on wealth.
1. Income taxes
1.1 Corporate income tax
Corporations with their legal or business centre in Türkiye are resident and taxed on worldwide income. Where neither the legal nor the business centre is in Türkiye, the corporation is non-resident and taxed only on Turkish-source income. The legal centre is the place stated in the articles of association; the business centre is where activities are concentrated and managed.
| Corporate income tax | Rate |
|---|---|
| Standard rate | 25% |
| Income from export activities | 20% (5-point reduction) |
| Banks, insurers, financial leasing, factoring, financing and similar institutions | 30% |
The 25% standard rate has applied since the 2023 tax period. The 5-point reduction for export income is applied to the portion of income derived exclusively from exports.
1.2 Minimum corporate tax
Since the 2025 tax period, a domestic minimum corporate tax of 10% applies. It is calculated on corporate income before specified deductions and exemptions, and the company pays the higher of the standard corporate tax and this minimum. It applies at provisional tax periods as well as annually. Newly established companies are outside its scope for their first three accounting periods.
This matters most to companies whose effective rate was low because of exemptions and incentives — including free zone and technopark users, who can no longer assume a nil result without modelling it.
Türkiye has also implemented the global minimum tax rules, which are relevant to in-scope multinational groups.
1.3 Provisional corporate tax
Provisional corporate tax is filed four times a year. The fourth period was reinstated for tax periods beginning on or after 1 January 2025, having previously been abolished. Returns are due on the 17th day of the second month following the quarter end, with payment on the same day.
1.4 Dividend withholding tax
| Recipient | Rate |
|---|---|
| Resident corporation | 0% — no withholding on resident-to-resident distributions |
| Resident individual | 15% |
| Non-resident individual | 15% |
| Non-resident corporation | 15%, commonly reduced to 5–15% by treaty |
| Branch profit remitted to head office | 15%, after deduction of corporate tax |
The rate was raised from 10% to 15% with effect from 22 December 2024. A capital increase funded from retained earnings is not a distribution, so no withholding arises.
1.5 Individual income tax
Residents — those who reside in Türkiye and those who spend more than a continuous period of six months here in a calendar year — are taxed on worldwide income. Non-residents are taxed only on Turkish-source income.
Income comprises business profits, agricultural profits, salaries and wages, income from independent personal services, income from immovable property and rights, income from movable property, and other income and earnings.
2026 brackets — employment income
| Income band (TRY) | Rate |
|---|---|
| Up to 190,000 | 15% |
| 190,001 – 400,000 | 20% |
| 400,001 – 1,500,000 | 27% |
| 1,500,001 – 5,300,000 | 35% |
| Over 5,300,000 | 40% |
2026 brackets — non-employment income
| Income band (TRY) | Rate |
|---|---|
| Up to 190,000 | 15% |
| 190,001 – 400,000 | 20% |
| 400,001 – 1,000,000 | 27% |
| 1,000,001 – 5,300,000 | 35% |
| Over 5,300,000 | 40% |
Brackets are re-indexed every year. The top rate of 40% is a comparatively recent addition — guides still showing a 35% ceiling are out of date.
1.6 Withholding tax on other payments
| Payment | Rate |
|---|---|
| Commercial and workplace rent | 20% |
| Professional services (independent personal services) | 20% |
| Royalties and payments for intangible rights abroad | 20%, commonly 10% under treaty |
| Professional and consultancy services paid abroad | 20%, subject to treaty relief |
| Interest paid to non-residents | 10% general local rate |
| Construction and repair work spanning more than one year | 5% |
Withholding on payments abroad is the single most common area where a foreign-owned Turkish company creates an unbudgeted liability — typically by paying a group service charge, licence fee or management fee without considering Turkish withholding or the treaty position. It is worth a conversation before the invoice is raised, not after.
2. Taxes on expenditure
2.1 Value added tax
| VAT rate | Applies to |
|---|---|
| 20% | Standard rate |
| 10% | Reduced rate |
| 1% | Super-reduced rate |
These rates took effect on 10 July 2023, when the standard rate moved from 18% to 20% and the reduced rate from 8% to 10%. Any guide still quoting 18% predates that change.
VAT exemptions include, among others:
- Exports of goods and services
- Roaming services rendered in Türkiye for non-resident customers under international roaming agreements, subject to reciprocity
- Contract manufacturing for clients operating in free zones
- Petroleum exploration activities
- Services rendered at harbours and airports for vessels and aircraft
- Supply of machinery and equipment within the scope of an investment incentive certificate
- Transit transportation
- Deliveries and services to diplomatic representatives and consulates on a reciprocity basis, and to international organisations with exempt status
- Banking and insurance transactions subject to Banking and Insurance Transaction Tax
2.2 Special consumption tax
Four product groups are subject to SCT at differing rates: petroleum products, natural gas, lubricating oil and solvents; automobiles and other vehicles, motorcycles, aircraft, helicopters and yachts; tobacco products and alcoholic beverages; and certain luxury products. Unlike VAT, SCT is charged once rather than at each stage.
2.3 Banking and insurance transaction tax
Banking and insurance transactions are exempt from VAT but subject to BITT, which applies to income earned by banks such as loan interest. The general rate is 5%. Consumer loans are taxed at a higher rate. Interbank deposit interest and repo transactions are taxed at 1%, and foreign exchange sales at a low proportional rate with a list of exempt transactions. Life insurance and private pension transactions are exempt.
Rates in this area are amended by Presidential Decision more often than most — check before relying on them.
2.4 Stamp duty
Stamp duty applies to a wide range of documents including contracts, notes payable, capital contributions, letters of credit, letters of guarantee, financial statements and payrolls. It is levied as a percentage of the value stated in the document, at rates ranging from 0.189% to 0.948% — contracts generally at 0.948% and payroll at 0.759% — or as a fixed amount for certain documents.
There is an annual cap per document, uprated each year. For 2026 the cap is TRY 29,115,961.10.
Stamp duty is the tax foreign-owned companies most often overlook entirely, because in most other jurisdictions signing a contract does not create a tax liability. In Türkiye it can, including for contracts signed abroad that are brought into Türkiye.
3. Taxes on wealth
- Real estate tax — buildings, apartments and land are taxed at rates between 0.1% and 0.6%, with a Contribution to the Conservation of Immovable Cultural Property levied at 10% of that tax
- Motor vehicle tax — fixed annual amounts varying by the age and engine capacity of the vehicle
- Inheritance and gift tax — levied at rates from 1% to 30%
Tax incentives
The investment incentive system was replaced in its entirety in May 2025. The four schemes described in older material — General, Regional, Large-Scale and Strategic — no longer exist in that form, and the General Incentive Scheme has been abolished outright. See the investment incentives guide for the current structure.