Turkey has fully digitized its accounting and tax infrastructure. For foreign companies operating through a local entity (joint-stock company, limited company, branch, or liaison office), compliance with the Turkish Commercial Code (TTC) and Tax Procedure Law (VUK) is non-negotiable. Paper ledgers are mostly extinct — electronic bookkeeping (e-Defter) and e-invoicing are mandatory for the majority. This guide walks you through every accounting obligation, from opening entries to year-end closings, plus severe penalties for misstatements.

📒 1. Mandatory Books of Accounts (Defterler)

Every foreign-owned company or branch must maintain three core statutory books, either in electronic or physical format depending on revenue threshold:

Electronic era: As of 2026, any taxpayer whose gross revenue exceeds TRY 3 million (approx USD 90k) in the previous fiscal year must keep e-Defter (electronic ledger). Newly established foreign subsidiaries with initial capital over TRY 500k are encouraged to start directly with e-ledger. All joint-stock companies (A.Ş.) regardless of revenue are required to use e-Defter from incorporation.

🧾 2. E-Invoice & E-Archive Mandate

Foreign companies cannot escape the e-transformation. Since 2025, all joint-stock companies (A.Ş.) and limited companies (Ltd. Şti.) exceeding TRY 3 million annual turnover must use the e-Invoice (e-Fatura) system. Even below threshold, voluntary registration is possible and often recommended for B2B cross-border transactions.

• e-Invoice (e-Fatura): Mandatory for invoices issued to other registered taxpayers. Integrates with GİB.
• e-Archive: Required for invoices issued to non-registered individuals/consumers — stored digitally and reported monthly.
• e-Ledger (e-Defter): Digital legal books with electronic signatures, submitted monthly to GIB.
• e-Declarations: All tax returns (VAT, CIT, WHT) filed through the Internet Tax Office.

📊 3. Financial Reporting & Independent Audit

Under Turkish Commercial Code, foreign subsidiaries may be subject to independent audit if they exceed 2 of 3 criteria for two consecutive periods:

Even below thresholds, parent company requirement or sector-specific regulations (banking, energy, fintech) may mandate an independent audit by a KGK-registered audit firm. Annual financial statements must be prepared in accordance with Turkish Financial Reporting Standards (TFRS) or full set TAS/TFRS for listed entities.

Submission: The annual financial statements, auditor’s report, and tax balance sheet are submitted to the Trade Registry Gazette (Türkiye Ticaret Sicili Gazetesi) within 4 months after year-end.

📅 4. Key Accounting & Reporting Deadlines

🏢 5. Special Case: Liaison Offices (İrtibat Bürosu)

Foreign companies may open a liaison office that is prohibited from commercial activity (market research, representation only). They do not pay corporate tax but still must keep accounting records for expenses and proof of no revenue generation. They must submit an annual activity report and expense log to the Ministry of Trade. E-invoice is not mandatory but recommended for expense invoices from local suppliers. Failure to follow accounting transparency can lead to closing of the liaison office.

All liaison offices need to appoint a local certified accountant (SMMM) to prepare periodic expense reports and cash book. The “No commercial income” confirmation must be supported by accounts.

👔 6. Sworn-in Financial Advisors (YMM) vs CPAs

Unlike many jurisdictions, Turkish law requires that the person responsible for accounting records and tax declarations must be a Chamber-registered Certified Public Accountant (SMMM) or Sworn-in Financial Advisor (YMM). A foreign company cannot assign an internal unlicensed employee to sign e-ledger or statutory filings. YMMs have additional authority to certify ledgers and perform tax audits.

• Foreign subsidiary: Must have a contract with an SMMM/YMM for monthly accounting, declaration, and e-ledger approval.
• Responsibility for accuracy and timeliness lies jointly with the legal representative and the accountant.

💱 7. Foreign Currency Accounting Rules

All mandatory books must be kept in Turkish Lira (TRY) and Turkish language. However, foreign-currency transactions must be recorded at the TCMB (Central Bank) effective exchange rate on the transaction date. Year-end valuation of FX assets/liabilities using official rates is mandatory, and unrealized exchange gains/losses are recognized in P&L for tax purposes. There is no “functional currency election” for tax accounting — books must always show TRY equivalents.

📌 Step-by-Step: Setting up Accounting for a Foreign Entity

• Step 1: Obtain Tax ID (VKN) and register to the Trade Registry.
• Step 2: Sign a service agreement with an SMMM/YMM (CPA).
• Step 3: Activate e-Defter and e-Fatura via GİB portal (or apply for physical book permission if revenue below threshold but not recommended).
• Step 4: Integrate accounting software (e.g., Logo, Mikro, Netsis) that supports e-ledger BERAT output.
• Step 5: Start monthly e-ledger submission, VAT/WHT declarations, and keep supporting documents (digital archive).
• Step 6: At year-end, carry out inventory counts, prepare closing entries, TFRS financials, and independent audit if applicable.
• Step 7: Submit financial statements to the Trade Registry and file CIT return by end of April.

❓ Frequently Asked Questions – Foreign Company Accounting