Corporate Tax in Turkey 2026: Complete Guide for Foreign Companies

Understanding corporate tax obligations is one of the most critical steps for any foreign company operating in Turkey. The Turkish tax system has undergone significant changes in recent years, with the corporate tax rate now set at 25% for 2026, along with new minimum tax rules and updated incentive programs. This comprehensive guide covers everything foreign businesses need to know about corporate taxation in Turkey for 2026.

Corporate Tax Rate in Turkey 2026

Turkey’s standard corporate tax rate for 2026 is 25%, applying to the worldwide income of resident companies and the Turkey-sourced income of non-resident companies. This rate was increased from the previous 20% as part of broader fiscal reforms.

Key rate variations for 2026:

• Standard Rate: 25% for all corporate taxpayers

• Financial Institutions: 30% for banks, insurance companies, and financial institutions

• Qualifying Export Income: The rate is reduced by 5 percentage points only for the portion of taxable profit attributable to qualifying export activity. It is not a blanket rate for all income of an exporter.

Turkey has signed double taxation agreements with over 85 countries, including the United States, United Kingdom, Germany, France, and most EU member states. These treaties help prevent the same income from being taxed in two jurisdictions and often provide reduced withholding tax rates on dividends, interest, and royalties.

Domestic Minimum Corporate Tax

Turkey’s 10% domestic minimum corporate tax applies to 2025 and later-period income. It is calculated on a statutory base before specified exemptions and deductions, rather than by simply multiplying accounting profit by 10%. Turkish corporate taxpayers and non-resident corporations that must file a return for Turkey-sourced business income can fall within the regime. Newly established companies are outside the regime for their first three accounting periods, subject to the detailed rules in the Revenue Administration’s 2026 domestic minimum corporate tax guide.

Global Minimum Tax - Pillar Two (OECD)

Turkey has enacted global and domestic minimum top-up tax rules aligned with the OECD GloBE framework for in-scope multinational groups, generally using a EUR 750 million consolidated revenue threshold and a 15% minimum effective rate. The calculation is group- and jurisdiction-specific; it should not be presented as an automatic 15% top-up on every Turkish subsidiary. In-scope groups should prepare a separate Pillar Two analysis using the statutory financial-accounting and adjustment rules.

Tax Incentives for Foreign Investors

Despite the rate increase, Turkey continues to actively encourage foreign investment through robust incentive programs, including the new HIT-30 (High Tech Turkiye) program - a $30 billion initiative targeting electric vehicles, batteries, chips, solar and wind energy, and R&D:

• Regional Investment Incentives: Reduced corporate tax rates in Priority Development Regions, employer social security contribution support, land allocation, and machinery support grants

• Technology Development Zones (Teknokent): Income from R&D and software development activities is exempt from corporate tax and income tax until December 31, 2028

• Free Trade Zones: Manufacturing companies operating in free trade zones enjoy corporate tax exemptions on export-related income

• Strategic Investment Incentives: For investments exceeding certain thresholds in strategic sectors, additional benefits including VAT exemptions and customs duty exemptions

• Machine Support (New): Direct cash grants for high-unit-price machinery and equipment purchases

Tax Filing and Compliance Requirements

Corporate tax returns in Turkey must be filed annually by the end of April following the fiscal year. The fiscal year typically aligns with the calendar year (January 1 to December 31).

Key Filing Deadlines for 2026

• Annual Corporate Tax Return: By end of April (e.g., April 30, 2026 for FY 2025)

• Advance Corporate Tax: Filed and paid for each applicable provisional-tax period on the dates published in the annual GIB tax calendar

• Monthly VAT and Withholding Returns: Filing and payment dates depend on the return type and current calendar; verify the relevant period in the GIB tax calendar (see also our VAT in Turkey 2026 guide)

• Transfer Pricing Documentation: Annually, maintained in company records

Value Added Tax (VAT) in Turkey 2026

Turkey’s principal VAT rates are 1%, 10%, and 20%, but the applicable rate follows the current legal schedules and the exact classification of the supply. Exports can be exempt with a right of deduction when the statutory conditions and evidence requirements are satisfied. Refund thresholds are specific to the type of transaction and claim; a single amount should not be presented as a universal minimum for every VAT refund.

Transfer Pricing Rules

Turkey follows OECD Transfer Pricing Guidelines. Companies conducting transactions with related parties must document that these transactions are at arm’s length prices; see our transfer pricing in Turkey guide for documentation requirements. Required documentation includes an annual transfer pricing report and, for larger groups, Country-by-Country Reporting (CbCR). Failure to maintain proper documentation can result in tax adjustments and penalties.

Withholding Taxes 2026

Turkey applies withholding taxes on various payments made to non-residents:

• Dividends: 15% general domestic rate for qualifying payments to non-residents from 22 December 2024; a treaty may reduce the rate if its conditions are met

• Interest: 0% to 10% depending on type and recipient

• Royalties: 20% (may be reduced under tax treaties)

• Service Fees: The domestic rate and taxing right depend on the nature of the service, where it is performed, whether a permanent establishment exists, and the applicable treaty

The Revenue Administration’s current non-resident corporate withholding table should be checked before payment.