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Corporate - Significant developments
Last reviewed - 27 March 2026Extension of Istanbul Financial Center incentives
The duration of key incentives under the Istanbul Financial Center (IFC) regime has been extended. The 100% corporate tax deduction applicable to financial service export income has been prolonged until 2047. In addition, the exemption from financial activity-related fees granted to participating entities has been extended to 20 years.
Expansion of deductions for transit trade and offshore trading
The scope and rate of the corporate tax deduction applicable to income derived from transit trade and offshore trading activities have been expanded. The deduction rate has been increased to 95% for general application, while a 100% deduction is available for taxpayers operating in the IFC or in designated industrial zones. The incentive remains subject to conditions, including that the goods are traded entirely outside Turkey and that the relevant income is transferred to Turkey.
Introduction of Qualified Service Center regime
A new Qualified Service Center (QSC) regime has been introduced to attract internationally oriented service operations to Turkey. Companies qualifying as QSCs (i.e. operating in at least three countries and generating at least 80% of their revenues from foreign related parties) will benefit from significant tax incentives.
Under this regime, 95% of income derived from services provided abroad may be deducted from the corporate tax base, provided that such income is remitted to Turkey. This deduction increases to 100% for QSCs operating within the Istanbul Financial Center (IFC) or in certain designated industrial zones. The incentive is available for a period of 20 fiscal years.
Reduced corporate tax rate for manufacturing and agricultural activities
The corporate income tax rate has been reduced to 12.5% for income derived exclusively from manufacturing activities carried out by companies holding an industrial registry certificate, as well as for income derived from agricultural production activities. This reduced rate will apply starting from the 2027 tax year and subsequent periods.
New asset amnesty regime introduced
Law No. 7582 (May 2026) introduces a new asset amnesty regime allowing individuals and corporate taxpayers to declare previously unrecorded assets held domestically or abroad, including cash, gold, foreign currency, securities, and other capital market instruments. Such assets can be brought into Turkey or recorded in statutory books by 31 July 2027.
The applicable tax rate is generally 5%, which may be reduced to between 0% and 4% depending on the commitment to hold the declared assets in specified financial instruments for a minimum period ranging from one to five years. Declared assets will not be subject to tax audit or reassessment, and protections are provided against additional tax assessments in ongoing tax inspections to the extent the declared amounts cover identified tax base differences.
Withholding tax (WHT) rate on dividends increased
The WHT rate applicable on dividend payments was increased to 15% in December 2024 and remains applicable. Accordingly, any dividends paid to a resident or non-resident individual, or a non-resident company, on or after 22 December 2024 will be subject to 15% WHT, unless the rate is reduced under a tax treaty. No WHT is imposed on dividends paid to a resident company, so the recent amendment does not have impact on profit distributions from a resident company to another resident company.
The law implementing Pillar Two rules has been implemented and applies starting from 2024/2025
The law number 7524 introducing implementation of the Pillar Two rules appeared in the Official Gazette of 2 August 2024. Similar to the Organisation for Economic Co-operation and Development (OECD) Model Rules and the Pillar Two Directive, the Turkish Pillar Two legislation will apply to constituent entities that are members of a multinational enterprise (MNE) group that has annual revenue of Turkish equivalent of 750 million euros (EUR) or more in the consolidated financial statements of the ultimate parent company in at least two of the four fiscal years immediately preceding the tested fiscal year.
In general, the Turkish Pillar Two provisions do not differ significantly from the European Union (EU) Minimum Tax Directive. Very briefly, the Turkish Pillar Two regulations introduce the global minimum top-up taxation rules by providing for the main interlocking measures, i.e. the Income Inclusion Rule (IIR) and the Undertaxed Payment Rule (UTPR) as well as a Qualifying Domestic Minimum Top-Up Tax (QDMTT) under the safe-harbour OECD standards. The new rules are effective for fiscal years starting from 1 January 2024, except for the UTPR provisions, which apply to fiscal years starting from 1 January 2025. Implementation guidance has also been further clarified during 2025 and 2026.
Implementation of a domestic minimum corporate tax regime
Law No. 7524, published in the Official Gazette on 2 August 2024, introduced a domestic minimum corporate tax regime to ensure that corporate income tax is not less than 10% of corporate income calculated before certain exemptions and deductions. Under this regime, corporate taxpayers are required to compute their tax liability under both the standard corporate tax system and a parallel minimum tax system, and to pay the higher amount. The domestic minimum tax regime applies to fiscal years starting from 1 January 2025 and subsequent periods.
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