Impostos a Turquia

Company Tax

Following the Law number 7456 published in 15 July 2023, the corporate income tax rate has been increased to 25% from 20% for companies other than those in the financial sector.

Tax Rate For Foreign Companies

Resident companies, with their legal seat or place of management in Turkey, are full taxpayers and are taxed on worldwide income. Non-resident companies are limited taxpayers and taxed only on income derived in Turkey.
Branches are taxed solely on the income derived from activities in Turkey since they are regarded as non-resident entities for Turkish tax purposes. Branch profits are subject to Turkish CIT at the rate of 25%  (same as subsidiaries).
The branch profit transferred to headquarters is subject to dividend withholding tax at a rate of 10%, effective from 22 December 2021 (previously the WHT was 15%). There are tax treaties signed by Turkey that provide withholding rates less than 10% on dividends under certain conditions (applicable subject to the fulfilment of the treaty eligibility conditions).

Capital Gains Taxation

Capital gains derived by a company are generally taxable as ordinary corporate income. However, exemptions apply as follows: (i) 75% of capital gains from the sale of participations and (ii) 25% of capital gains from the sale of immovable property acquired before 15 July 2023, are exempt from corporate income tax if the following conditions are met:
- The participation or property has been held for at least two years;
- The gains are retained in a special fund account under shareholders’ equity for five years following the year of the sale and are not transferred to another account within this period, except for transfers to the capital account by way of a capital injection;
- The consideration for the sale is collected by the end of the second calendar year following the year of the sale; and
- The company does not hold the participation or property for the purpose of ordinary business involving the trading of participations or properties.

Capital gains derived by an international holding company from the sale of foreign participations are exempt from corporate income tax, provided the foreign participation has been held for at least two years. To qualify as an “international holding company,” a resident company must meet the following requirements:
- It must be a joint stock company;
- At least 75% of its total assets (excluding cash items) must consist of foreign participations held for a continuous period of at least one year;
- It must hold at least 10% of the capital of each foreign participation; and
- The foreign participation must be in the form of a joint stock company or limited liability company.

Main Allowable Deductions and Tax Credits

Expenses that can be deducted from the corporation tax base include ordinary and necessary expenses incurred in the course of general business, real property tax related to business, bad debts, and expenses for research and development. An allowance is available until the end of 2028 to companies that carry out qualifying R&D and design activities (100% of expenditure in addition to a deduction for such expenditure in the statutory accounts). Moreover, 80% of the income tax computed on the wages of R&D and design personnel is exempt from income withholding tax (the rate is increased to 95% for employees with a PhD or master’s degree in fundamental sciences, and 90% for employees with a master’s degree in any field or an undergraduate degree in fundamental sciences). Companies are also exempt from stamp duty on any R&D-related documents and goods imported to this end are exempt from customs duties. In addition, an increase in R&D expenditure compared to the previous year (at least by 20%) gives rise to further deductions.

Start-up expenses are considered deductible expenses as incurred. Moreover, the taxpayer has the option to capitalise such expenses and depreciate them over five years in equal amounts.

Donations to listed charities and for the construction of schools, hospitals, and scientific research organisations are deductible at up to 5% of the company’s gross profit. Under certain conditions, payments for pensions and employee termination benefits are deductible for corporate income tax purposes.

"Strategic" investments (as determined by the government, such as investment in the production of products that rely heavily on imports) give rise to a deduction of up to 100% of corporate tax, along with several other advantages concerning customs duties, employer's social security contributions, etc.
Profits arising from software, design, and research and development (R&D) activities conducted solely within Technological Development Zones are exempt from corporate income tax until 31 December 2028. Companies (excluding banks, financial institutions, insurance companies, and pension funds) that offer at least 20% of their shares through their initial public offering (IPO) on the Istanbul stock exchange are eligible for a corporate income tax rate reduction by two percentage points for a period of five years, commencing from the year of the IPO. Export-oriented companies benefit from a 5% reduction in corporate income tax on earnings derived exclusively from export activities, while manufacturing firms enjoy a 1% reduction in corporate income tax on earnings solely derived from manufacturing activities.

A notional interest deduction (NID) is offered, amounting to 50% of the interest calculated on cash increments in registered capital (for existing companies) or cash capital contributions (for newly incorporated companies), based on the average interest rate announced by the Central Bank for Turkish Lira-denominated commercial loans. This deduction becomes applicable from the fiscal year in which the resolution for the cash capital increase is registered and is restricted to the subsequent four fiscal years. However, for cash capital increases made on or after 26 October 2021, funded with cash from abroad, the NID rate is increased to 75%. Notably, this deduction is unavailable for entities operating in the finance, banking, and insurance sectors, as well as public economic enterprises.

Tax losses can be carried forward for up to five years. The carryback of losses is prohibited. Charges for royalties and interest paid to foreign affiliates may be deductible for corporate income tax purposes when transfer pricing and thin capitalisation rules are followed.

For further information on available tax incentives, consult the dedicated page on the Revenue Administration portal.

Other Corporate Taxes

Real estate tax is levied based on the assessed value of land or buildings, with rates set at 0.2% for buildings, 0.1% for dwellings, 0.1% for land, and 0.3% for building sites. These rates are doubled for properties situated within larger cities. The valuation of buildings relies on square meter rates, which vary according to the property's location. Additionally, landlords must contribute 10% of the annual accrued real estate tax to the municipality for the protection of immovable cultural property; this contribution is collected alongside the real estate tax. Furthermore, municipalities impose an environmental tax on buildings utilized for various purposes, including commercial activities. The tax is applied in fixed amounts, updated annually based on specified categories. The responsibility for paying the environmental tax falls on the resident of the building, be it the landlord or the tenant.
Real estate transfers are subject to a tax calculated as 4% of the acquisition/transfer value, which is split equally between the buyer and the seller.

Stamp tax applies to a wide range of documents, including, financial statements, and payrolls. Stamp tax is levied as a percentage of the value stated on the agreements at rates varying between 0.189% and 0.948%. Salary payments are subject to stamp tax at a rate of 0.759% over the gross amounts.

Turkey levies a "Digital Service Tax" of 7.5% on service providers whose revenue derived from digital services during the previous fiscal year exceeds TRY 20 million in Turkey or EUR 750 million worldwide. The president is authorized to double the rate or reduce it to 1%, depending on the type of digital service.

A banking and insurance transaction tax is imposed at a standard rate of 5% on charges levied by banks and insurance companies. Banks are mandated to deduct a contribution to the resource utilization support fund (RUSF) from the principal amounts of foreign-denominated loans with an average maturity period of three years or less. The contribution rates vary: 3% for loans with an average maturity period of less than one year, 1% for loans with a maturity period of at least one year but less than two years, and 0.5% for loans with a maturity period of at least two years but less than three years. Loans with an average maturity of three years or more are exempt from the RUSF. Additionally, a 1% contribution applies to the interest accrued on Turkish Lira (TRY)-denominated loans with an average maturity of less than one year, while no contribution applies to TRY-denominated loans with an average maturity of one year or more. Imports conducted on credit are subject to a 6% RUSF, with certain exemptions. Moreover, the banking and insurance transaction tax extends to foreign exchange purchases from banks, insurance companies, and foreign exchange offices, at a rate of 0.2%. The Turkish president holds the authority to adjust this rate, reducing it to 0% or increasing it to 2%.

A "tourism share" is levied on designated enterprises at varying rates, namely 0.2%, 0.5%, and 0.05% (recently reduced from 0.075%) of the total net sales and leasing income generated by individual investors, legal entity investors, or operators of commercial tourism enterprises within these establishments, respectively. These rates are halved for revenue stemming from tourism sectors eligible for special incentives, including winter, thermal, health, rural, or qualified sports tourism. Notably, the tourism share does not apply to sea tourism vehicles holding a Tourism Administration Certificate issued by the Ministry of Culture and Tourism.
A 2% tax is imposed on specific accommodation services, as well as other services including food and beverage, activities, entertainment, swimming pool access, sports facilities, thermal services, and similar amenities provided by establishments such as hotels, motels, holiday villages, hostels, apartment hotels, guest houses, camping sites, chalets, or mountain houses.

Social security contributions for both the employer and the employee total 34.5% of an employee’s salary; 14% paid by the employee and 20.5% by the employer. In addition to social security payments, unemployment contribution is 3% of the salary, 1% for the employee and 2% for the employer. The monthly social security ceiling is TRY 150,018 for the period running from 1 January to 31 December 2024.

Other Domestic Resources

Revenue Administration

Tax Rate

Allowable Deductions and Tax Credits

Individual employees cannot claim business deductions, but contributions to approved pension schemes within Turkey are deductible.

Donations to specific institutions are tax-deductible. Individuals filing annual tax returns can deduct documented education expenses incurred in Turkey for themselves and their families, up to 10% of the income tax base. Personal insurance premiums for the individual, spouse, and/or children are also deductible, but limited to 15% of the individual's monthly gross income and the annual minimum wage amount.

For business income, the same general deductions applicable to corporations are available.

Special Expatriate Tax Regime

A foreign national who remains covered under their home country's social security system is exempt from paying Turkish social security premiums for up to three months, provided proof of foreign coverage is filed with the local social security office. If a social security treaty exists between the home country and Turkey, the exemption period may be extended according to the treaty. If the employee is not covered by foreign social security, full contributions will generally be required in Turkey.