Turkey Corporate Tax Guide 2026

Overview — Kurumlar Vergisi

Corporate income tax in Turkey is governed by the Corporate Tax Law (Kurumlar Vergisi Kanunu No. 5520). Resident companies (those registered or with their legal seat and place of effective management in Turkey) are taxed on worldwide income. Non-resident companies are taxed only on Turkish-source income through either a permanent establishment or directly. The tax year is the calendar year (1 January to 31 December), though companies may adopt a special fiscal period with approval. Corporate tax returns must be filed by the end of the 4th month following the close of the fiscal year (30 April for calendar-year companies), and tax is paid in one instalment by the same date. Quarterly advance corporate tax (geçici vergi) is paid at the same rate (25%) during the year, with a final reconciliation at year-end.

Corporate Tax Rate — 25% (Standard)

The standard corporate tax rate is 25% for the 2026 tax year. This rate applies to all resident companies unless they qualify for a reduced rate or a specific exemption. The effective rate may be reduced through investment incentives, R&D deductions, and other allowances. The rate was increased from 20% to 25% for 2023–2025 (and maintained at 25% for 2026). Certain sectors such as banking and finance may be subject to higher rates.

Reduced Rate — 20% for Certain Companies

Exporting companies and companies operating under an investment incentive certificate may benefit from a reduced corporate tax rate of 20% on their qualifying income. The reduced rate is applied to the portion of corporate income derived from exports or from investments covered by an incentive certificate. Additionally, companies whose shares are traded on BIST (Borsa Istanbul) may benefit from a 2 percentage point reduction for five years following their initial public offering (IPO), subject to maintaining a minimum public float.

Investment Incentive Regimes (Bölgesel Teşvik)

Turkey operates a comprehensive regional investment incentive system to promote economic development. The system has four tiers based on the region and the size of the investment:

• General Investment Incentives: For investments meeting minimum thresholds (TRY 1–3 million depending on region). Benefits include VAT exemption for machinery and equipment, customs duty exemption, and interest rate support.
• Regional Investment Incentives: Tiered by region (1–6, with 6 being the least developed). Benefits include corporate tax rate reduction (30–100% of the applicable rate for the investment period), social security premium support, land allocation, and interest rate support. The tax reduction percentage and duration increase for less developed regions.
• Strategic Investment Incentives: For investments that reduce import dependency (minimum TRY 50 million). Additional benefits include a reduced corporate tax rate of 20%, VAT refund, and 50% employer social security premium support for 7 years.
• Large-Scale Investment Incentives: For investments exceeding TRY 1 billion. Enhanced support across all categories.

Qualifying investments receive an Investment Incentive Certificate (Yatırım Teşvik Belgesi) from the Ministry of Industry and Technology.

R&D and Innovation Incentives

R&D Deduction (Ar-Ge İndirimi): 150% of qualifying R&D and innovation expenditures can be deducted from corporate taxable income. Qualifying activities include research, development, design, and software development that are conducted under an R&D project approved by the competent authorities or within an R&D centre. The deduction applies to wages of researchers and technicians, raw materials, depreciation of R&D equipment, and other direct R&D costs.

Technology Development Zones (Teknoparklar): Companies operating in approved technology development zones benefit from corporate tax exemption on income derived from R&D, software, and innovation activities until 31 December 2028. Additionally, employee wages are exempt from income tax and social security premiums for the same period.

Patent Income Exemption: 50% of income derived from patents developed from R&D activities in Turkey is exempt from corporate tax. This applies to patents registered with the Turkish Patent and Trademark Office (TÜRKPATENT) or certain international patent offices.

Dividend Distribution — Withholding Tax

When a Turkish company distributes dividends (profit distribution), a withholding tax (stopaj) is applied:

• To resident corporate shareholders: 0% withholding (dividends received by Turkish resident companies are exempt from corporate tax)
• To resident individual shareholders: 15% withholding tax on the gross dividend. The net dividend after withholding is included in the individual's annual income; 50% of the net dividend is exempt from IIT, and the remaining 50% is subject to progressive IIT rates.
• To non-residents: 15% withholding tax on gross dividends, unless reduced by an applicable double tax treaty. The rate may be reduced to 10%, 5%, or even 0% depending on the treaty and the level of shareholding.

Other Key Regimes

Participation Exemption: Dividends received by a Turkish company from its subsidiaries (domestic or foreign) are 100% exempt from corporate tax, provided the subsidiary is subject to at least 15% corporate tax in its jurisdiction and the parent holds at least 10% for at least one year.

Free Zones: Companies operating in Turkish free zones are exempt from corporate tax on their manufacturing income. Income from other activities (trading, services) in free zones may also be exempt under certain conditions.

Controlled Foreign Corporation (CFO) Rules: If a Turkish resident holds (directly or indirectly) at least 50% of a foreign entity that is subject to effective tax of less than 10%, and the foreign entity's passive income exceeds 25% of its total income, the Turkish shareholder may be subject to Turkish corporate tax on the foreign entity's undistributed profits.

FAQs

What is the corporate tax rate for banks?

Banks, financial institutions, and certain insurance companies may be subject to a higher rate — currently 30% (2026). Check with GİB for the latest applicable rate.

Can foreign companies claim the R&D deduction?

Yes, if the foreign company has a permanent establishment in Turkey and conducts qualifying R&D activities in Turkey, it can claim the R&D deduction against its Turkish taxable income.

How do I apply for an Investment Incentive Certificate?

Applications are made to the Ministry of Industry and Technology (Sanayi ve Teknoloji Bakanlığı). The process includes submitting a project feasibility report and meeting minimum investment thresholds based on the region.

Is there a minimum capital requirement?

Anonim Şirket (A.Ş.) requires minimum capital of TRY 250,000; Limited Şirket (Ltd. Şti.) requires TRY 50,000. At least 25% must be paid up before registration.

Disclaimer

This guide provides general information about Turkish corporate tax for the 2026 tax year. Rates and thresholds are based on the most recent published data and may change. Always consult with a qualified Yeminli Mali Müşavir or GİB for advice specific to your situation. InvestmentKit does not provide tax advice.