Corporate Tax in Turkey 2027: Rates, Minimum Tax & Foreign Company Guide
A practical 2027 corporate income tax guide for foreign-owned companies in Türkiye — covering the 25% standard rate, the new 12.5% manufacturing rate, export incentives, minimum corporate tax, dividends, branches, tax losses, Pillar Two and cross-border transactions.
Under Turkish legislation in force as of October 2026, the standard corporate income tax rate is 25%, while certain companies in the financial sector are generally subject to a 30% rate. From the 2027 tax year, qualifying income from manufacturing activities carried out by companies holding an Industrial Registration Certificate is subject to a 12.5% corporate tax rate. Qualifying export income can benefit from a five-percentage-point corporate tax rate reduction. Turkey also applies a domestic minimum corporate tax framework and separate 15% global minimum tax rules for large multinational groups.
What Is the Corporate Tax Rate in Turkey for 2027?
Under the legislation in force as of 1 October 2026, the general Turkish corporate income tax rate is 25%.
Certain companies operating in the financial sector are generally subject to a 30% corporate income tax rate.
However, the headline rate does not necessarily tell a company its effective Turkish tax burden.
The tax outcome may also be affected by:
- the nature of the company’s income;
- manufacturing activities;
- export income;
- investment incentives;
- tax exemptions and deductions;
- the domestic minimum corporate tax;
- transfer-pricing adjustments;
- non-deductible expenses;
- tax losses;
- foreign tax credits; and
- global minimum tax rules for large multinational groups.
Turkey Corporate Tax Rates: 2027 Summary
| Category | 2027 Rate / Treatment | Key Point |
|---|---|---|
| General companies | 25% | Standard corporate income tax rate under legislation currently in force. |
| Specified financial-sector companies | 30% | A higher rate applies to specified companies in the financial sector. |
| Qualifying manufacturing income | 12.5% | Applicable from 2027 where the statutory manufacturing conditions are met. |
| Qualifying export income | 5 percentage-point reduction | The reduction applies to income derived exclusively from qualifying export activities, subject to the rules. |
| Domestic minimum corporate tax | 10% framework | Applies to a separately determined minimum-tax base, with exclusions and transitional rules. |
| Global minimum tax / Pillar Two | 15% minimum effective tax framework | Relevant to multinational groups meeting the EUR 750 million consolidated-revenue test. |
The Major 2027 Change: 12.5% Corporate Tax for Manufacturing
One of the most important Turkish corporate tax developments for 2027 is the new rate applicable to qualifying manufacturing income.
From the 2027 tax year, the corporate income tax rate is applied at 12.5% to qualifying income derived exclusively from manufacturing activities carried out by corporations that:
- hold an Industrial Registration Certificate; and
- are actually engaged in qualifying manufacturing activities.
The legislation also applies the 12.5% rate to qualifying agricultural-production income.
Why this matters for foreign investors
A foreign group evaluating a Turkish factory should no longer model Turkish manufacturing solely using the 25% headline corporate tax rate.
For qualifying manufacturing profits generated from 2027 onward, the 12.5% rate can materially change the after-tax economics of a Turkish production operation.
Illustrative Manufacturing Example
Assume a qualifying Turkish manufacturing subsidiary generates TRY 100 million of taxable income derived exclusively from manufacturing activities.
| Illustrative Calculation | 25% Headline Rate | 12.5% Manufacturing Rate |
|---|---|---|
| Relevant taxable manufacturing income | TRY 100,000,000 | TRY 100,000,000 |
| Illustrative CIT rate | 25% | 12.5% |
| Illustrative CIT before other rules | TRY 25,000,000 | TRY 12,500,000 |
| Illustrative difference | TRY 12,500,000 | |
This simplified example does not take into account domestic minimum tax, investment incentives, non-deductible expenses, exemptions, losses or other company-specific items.
Does Every Manufacturer Automatically Get the 12.5% Rate?
No.
The reduced rate is tied to qualifying manufacturing income and statutory conditions.
A company may earn several different types of income during the same year, for example:
- manufacturing income;
- trading income;
- service income;
- interest income;
- rental income;
- foreign-exchange income; or
- other non-manufacturing income.
The company therefore needs an accounting structure capable of identifying which profits arise from the qualifying activity.
The reduced rate should not become a year-end tax allocation exercise based on unsupported estimates. The accounting system should allow qualifying manufacturing revenue, costs and relevant profit allocations to be identified and documented.
Manufacturing and Exporting: Can Both Tax Benefits Apply?
Turkey also applies a five-percentage-point corporate tax rate reduction to qualifying income derived exclusively from export activities.
However, the 2027 manufacturing provision prevents the same qualifying manufacturing income benefiting from an additional export-rate reduction under the export provision.
The distinction becomes particularly important where a company has both:
- domestic manufacturing sales;
- exported manufactured products;
- pure trading exports; and
- non-manufacturing business lines.
The tax calculation therefore requires activity-level profit analysis rather than simply applying one rate to the entire company.
What Is the Export Corporate Tax Reduction in Turkey?
Qualifying companies can benefit from a five-percentage-point reduction in the corporate tax rate applicable to income derived exclusively from export activities, subject to the relevant statutory conditions.
For a company otherwise subject to the 25% general rate, this can result in a 20% rate on qualifying export income.
The rules also cover certain export structures involving qualifying intermediary-export arrangements, subject to the statutory requirements.
Turkey’s 10% Domestic Minimum Corporate Tax
Turkey applies a domestic minimum corporate tax regime under which the corporate tax payable cannot, in general, fall below an amount determined using a 10% minimum-tax calculation based on corporate income before certain exemptions and deductions.
This does not mean that every Turkish company simply pays 10% tax.
Instead, the company performs the ordinary corporate tax calculation and the relevant minimum-tax calculation, with the applicable statutory adjustments and exclusions.
The minimum tax can therefore become important for companies that benefit from significant exemptions, deductions or reduced-rate mechanisms.
Are New Companies Exempt From the Domestic Minimum Tax?
An important exception applies to newly established companies.
Under the current rules, the domestic minimum corporate tax is not applied for the first three accounting periods beginning with the period in which a company first starts operations.
For example, under the current rules, a company first starting operations in 2026 would generally fall outside the domestic minimum corporate tax for its 2026, 2027 and 2028 accounting periods.
Important restructuring point
A company created through certain reorganisations such as mergers, demergers or changes in legal form should not automatically be assumed to qualify as a newly established company for this three-period treatment.
Corporate Tax Residence in Turkey
Turkish corporate taxation depends partly on whether the company is treated as a resident or non-resident taxpayer.
In general, a corporation is treated as fully liable to Turkish corporate income tax where its legal headquarters or business headquarters is in Turkey.
A Turkish-resident company is generally taxed on its worldwide corporate income, subject to exemptions, treaty provisions and foreign-tax-credit mechanisms where applicable.
A non-resident entity is generally taxed in Turkey on Turkish-source income within the scope of the applicable domestic rules and treaty provisions.
Subsidiary vs Branch: Does the Tax Treatment Differ?
A foreign investor entering Turkey may operate through a Turkish subsidiary or, depending on the business model, a Turkish branch of a foreign company.
The two structures are legally different even where the underlying business activity is similar.
| Issue | Turkish Subsidiary | Turkish Branch |
|---|---|---|
| Legal status | Separate Turkish legal entity | Extension of the foreign head office |
| Corporate income tax | Generally subject to Turkish CIT | Turkish branch profits generally subject to Turkish CIT |
| Profit repatriation | Dividend distribution | Branch profit transfer to head office |
| Additional withholding consideration | Dividend WHT may apply | Branch-profit remittance WHT may apply |
| Group accounting | Subsidiary consolidation | Branch reporting into head office |
Dividend Withholding Tax in Turkey
Corporate income tax is not necessarily the final Turkish tax cost when profits are distributed to a foreign shareholder.
Under the rules in force as of October 2026, dividends distributed by a Turkish resident company to a non-resident company are generally subject to 15% withholding tax, unless an applicable double tax treaty provides a lower rate and the relevant treaty conditions are satisfied.
Therefore, a foreign investor should distinguish between:
Do Tax Treaties Reduce Turkish Dividend Withholding?
Potentially, yes.
Turkey has an extensive double tax treaty network.
Depending on the shareholder’s country of residence, ownership percentage, beneficial-ownership status and the wording of the relevant treaty, the withholding tax applicable to dividends may be lower than the domestic rate.
Treaty entitlement should be reviewed before the dividend is distributed rather than after the payment has already been processed.
Branch Profit Remittance
A Turkish branch is generally taxed on income attributable to its Turkish activities.
Under the rules in force as of October 2026, a branch profit transferred to its foreign head office can also trigger a 10% branch-profit withholding tax, potentially subject to treaty relief.
This is one reason why branch-versus-subsidiary modelling should consider not only the headline corporate tax rate but also the intended repatriation mechanism.
How Is Taxable Corporate Income Calculated?
Turkish corporate tax does not simply apply to accounting revenue.
The calculation generally starts from the company’s commercial accounting result and applies the tax adjustments required under Turkish legislation.
Potential adjustments can include:
- non-deductible expenses;
- tax depreciation differences;
- provisions;
- thin capitalisation;
- transfer-pricing adjustments;
- tax exemptions;
- investment incentives;
- carried-forward tax losses;
- foreign tax credits; and
- other tax-specific adjustments.
Which Business Expenses Are Deductible?
The general principle is that ordinary and necessary business expenses incurred for generating and maintaining business income can be deductible where the relevant statutory and documentation requirements are satisfied.
Foreign-owned companies should pay particular attention to documentation.
An expense that is commercially understandable to headquarters is not automatically tax deductible in Turkey if the underlying invoice, contract, supporting documentation or tax treatment is insufficient.
Common Non-Deductible or High-Risk Expenses
The exact analysis depends on the transaction, but common review areas include:
- fines and penalties;
- unsupported management expenses;
- shareholder-related costs;
- expenses lacking appropriate documentation;
- transfer-pricing adjustments;
- certain financing costs;
- taxes specifically treated as non-deductible; and
- expenses that are not sufficiently connected with the generation or maintenance of business income.
Can Corporate Tax Losses Be Carried Forward?
Under the current rules, Turkish corporate tax losses can generally be carried forward for five years, subject to the applicable conditions.
Turkey does not generally permit corporate tax losses to be carried back.
For foreign groups, loss utilisation should be modelled together with:
- expected profitability;
- domestic minimum corporate tax;
- investment incentives;
- corporate restructurings;
- exempt income; and
- changes in business activities.
Does Turkey Allow Group Tax Consolidation?
No general group consolidation regime exists for Turkish corporate income tax.
Each Turkish company is generally treated as a separate taxpayer.
This means that the profit of one Turkish group company cannot ordinarily be offset simply against the loss of another Turkish group company through a consolidated corporate tax return.
For international groups with several Turkish entities, this can affect:
- legal-entity design;
- financing;
- intercompany transactions;
- business restructurings;
- investment structuring; and
- effective tax rate planning.
Transfer Pricing and Corporate Tax
Turkey’s transfer-pricing framework is based on the arm’s-length principle.
Where a Turkish company transacts with related parties, the pricing and terms should reflect what independent parties would have agreed under comparable circumstances.
Relevant transactions can include:
- management fees;
- IT and software charges;
- royalties;
- shared service charges;
- goods;
- intercompany loans;
- interest;
- cost allocations; and
- other related-party services.
A transfer-pricing adjustment can increase Turkish taxable corporate income and may also create other tax consequences.
For multinational groups, corporate tax and intercompany accounting should therefore be reviewed together rather than as separate year-end exercises.
Corporate Tax and Intercompany Management Fees
Management fees paid by a Turkish subsidiary to a foreign parent or group service company deserve particular attention.
Questions can include:
- Was a real service provided?
- Did the Turkish company benefit from the service?
- Is the allocation methodology supportable?
- Is the price arm’s length?
- Is the expense deductible?
- Does withholding tax apply?
- Does Turkish VAT or reverse-charge VAT need to be considered?
- Is the underlying contract consistent with the invoice and accounting treatment?
An intercompany invoice is not tax support by itself. The accounting entry, contractual basis, transfer-pricing support and underlying economic activity should tell the same story.
Foreign Tax Credits
A Turkish resident company earning foreign-source income may, subject to the statutory requirements, be able to credit qualifying foreign taxes against Turkish corporate tax attributable to the relevant foreign income.
Documentation is particularly important.
Foreign tax paid should therefore be tracked by:
- country;
- income type;
- tax period;
- gross income;
- foreign tax amount;
- supporting tax certificate; and
- relevant treaty or domestic-law treatment.
Advance Corporate Tax in Turkey
Turkish corporate taxpayers generally operate within a self-assessment system and make advance corporate tax filings during the year.
For a calendar-year taxpayer, the annual corporate income tax return is generally filed by the 30th day of the fourth month following the year-end — ordinarily 30 April.
International finance teams should therefore build Turkish corporate tax into both:
- the quarterly tax-close process; and
- the annual reporting calendar.
Corporate Tax Provision vs Corporate Tax Return
The corporate tax return is a statutory tax filing.
A corporate tax provision used by an IFRS or US GAAP reporting group serves a different financial-reporting purpose.
The group may need to consider:
- current tax;
- deferred tax;
- tax losses;
- uncertain tax positions;
- IAS 29 effects;
- permanent differences;
- temporary differences;
- minimum tax;
- tax incentives; and
- Pillar Two top-up tax.
The Turkish tax-return process should therefore feed into group tax reporting rather than operate as an isolated compliance exercise.
Turkey’s 15% Global Minimum Tax and Pillar Two
Turkey has introduced OECD Pillar Two-based global minimum tax rules for large multinational groups.
The framework generally concerns groups whose consolidated revenue reaches at least EUR 750 million in at least two of the four preceding fiscal years, subject to the detailed rules and exclusions.
The Turkish rules include a 15% Qualified Domestic Minimum Top-Up Tax framework for qualifying Turkish operations of in-scope multinational groups.
25% headline CIT does not make Pillar Two irrelevant
A Turkish entity’s statutory corporate tax rate may exceed 15%, but Pillar Two calculates an effective tax rate using its own concepts, covered taxes, adjustments, exclusions and jurisdictional methodology.
Large multinational groups should therefore not conclude that Turkey is automatically outside Pillar Two analysis simply because the headline corporate income tax rate is 25%.
How Does the 12.5% Manufacturing Rate Interact With Pillar Two?
This is likely to become a particularly important multinational tax question from 2027.
A qualifying Turkish manufacturing company may benefit from a 12.5% corporate tax rate on qualifying manufacturing income under domestic law.
Separately, an in-scope multinational group may need to evaluate the Turkish jurisdiction under the 15% global minimum tax framework.
The two regimes should not be mechanically compared by looking only at the statutory percentages.
A proper Pillar Two calculation must consider the relevant GloBE income, covered taxes, substance-based exclusions, deferred-tax treatment, safe harbours and other applicable rules.
Nevertheless, for multinational manufacturers, the interaction between the 12.5% Turkish manufacturing rate and Pillar Two should be modelled before 2027 budgeting is finalised.
Investment Incentives and Corporate Income Tax
Turkey also operates investment-incentive mechanisms that can affect corporate taxation of qualifying investments.
Where an investment is carried out under an eligible Investment Incentive Certificate, reduced corporate tax mechanisms and other support may be available depending on the investment and incentive framework.
For an investor planning a new factory, expansion or large capital expenditure programme, the tax model should therefore consider several layers:
These layers need to be analysed together. Looking at each incentive in isolation can produce an incorrect effective-tax-rate forecast.
Corporate Tax for Technology and R&D Companies
Technology and R&D businesses can be affected by separate incentive regimes, including qualifying technology-development-zone and R&D arrangements.
Some qualifying incentives are also relevant to the domestic minimum corporate tax calculation because specific exemptions and deductions may receive separate treatment under the minimum-tax rules.
For technology groups, the tax model should distinguish between:
- ordinary commercial income;
- qualifying technology-zone activities;
- R&D activities;
- service-export income;
- IP-related income;
- foreign-customer income; and
- related-party transactions.
Permanent Establishment Risk for Foreign Companies
A foreign company does not need to incorporate a Turkish subsidiary before Turkish corporate tax can become relevant.
A foreign company’s activities in Turkey may create a taxable presence or permanent-establishment issue depending on the facts, Turkish domestic law and any applicable double tax treaty.
Relevant situations can include:
- an office or fixed place in Turkey;
- employees working in Turkey;
- sales or contracting activities;
- dependent representatives;
- construction or project activities;
- warehousing or operational facilities; and
- management activities performed from Turkey.
The analysis should be completed before assuming that “we do not have a Turkish company” means “we do not have Turkish corporate tax exposure.”
Foreign-Owned Subsidiaries: What Should Headquarters Monitor?
| Area | CFO Question |
|---|---|
| Effective tax rate | Why does Turkish tax expense differ from 25% of accounting profit? |
| Manufacturing | Does the company qualify for the 12.5% rate from 2027? |
| Exports | Which income qualifies for the export-rate reduction? |
| Minimum tax | Does the 10% domestic minimum tax limit expected tax benefits? |
| Losses | When will carried-forward tax losses expire? |
| Intercompany | Are management fees, royalties and financing arm’s length and properly documented? |
| Dividends | What withholding rate applies when profits are repatriated? |
| Pillar Two | Is the group within the EUR 750 million framework and what is the Turkish ETR? |
| Tax provision | Does the statutory tax calculation reconcile to group tax reporting? |
2027 Corporate Tax Planning Checklist
- Confirm the company’s expected 2027 income streams. Separate manufacturing, exports, services, trading and financial income.
- Review Industrial Registration Certificate status. Manufacturing groups should confirm whether the 12.5% rate can apply.
- Design profit attribution. Ensure accounting can distinguish qualifying manufacturing and export profits.
- Model domestic minimum corporate tax. Do not calculate incentives only using the headline CIT rate.
- Review tax-loss expiry dates. Turkish tax losses generally have a five-year carryforward period under current rules.
- Review intercompany agreements. Management fees, royalties, loans and service charges should be updated before 2027 transactions begin.
- Prepare transfer-pricing documentation. Do not wait until a tax audit to document related-party pricing.
- Model dividend repatriation. Review domestic withholding and treaty eligibility.
- Review investment incentives. New factories and capital expenditure may require a broader incentive analysis.
- Assess Pillar Two. Groups meeting the EUR 750 million test should integrate Turkish entities into the global minimum-tax process.
- Align tax with ERP and accounting. Reduced-rate income needs reliable accounting data and account mapping.
- Build the 2027 tax calendar. Connect advance corporate tax, annual CIT, transfer pricing and group reporting deadlines.
Why ERP and Chart-of-Accounts Design Matter for Corporate Tax
Corporate tax planning cannot work reliably if the accounting data does not identify the activity that generated the profit.
This becomes more important in 2027 because different streams of income can potentially carry materially different tax consequences.
For example, a company may need to identify:
- qualifying manufacturing income;
- export income;
- non-qualifying trading income;
- intercompany income;
- investment-incentive income;
- non-deductible expenses; and
- separate business lines.
The ERP and chart of accounts should support that distinction.
Related guides: ERP Localization in Turkey and Turkish Chart of Accounts vs Group Chart of Accounts .
Corporate Tax and IAS 29
Foreign groups should also distinguish Turkish corporate tax calculations from IAS 29 inflation accounting.
IAS 29 is a financial-reporting framework for entities whose functional currency is the currency of a hyperinflationary economy.
Turkish tax calculations and IAS 29 reporting can use overlapping accounting information, but they should not be assumed to produce the same adjusted carrying values or tax outcomes.
The difference can also affect deferred tax.
Read: IAS 29 Inflation Accounting in Turkey for Foreign Subsidiaries .
How SystemsCPA Supports Corporate Tax in Turkey
SystemsCPA works with foreign-owned businesses that need Turkish corporate tax compliance to connect with accounting, international reporting and group tax processes.
Depending on the operating model, support can include:
- corporate income tax compliance;
- advance corporate tax calculations;
- tax provision support;
- tax-account reconciliations;
- manufacturing and export income analysis;
- domestic minimum tax analysis;
- review of deductible and non-deductible expenses;
- tax-loss tracking;
- intercompany transaction review;
- transfer-pricing coordination;
- foreign tax credit review;
- dividend and profit-repatriation analysis;
- Pillar Two data support;
- ERP and chart-of-accounts tax mapping; and
- coordination with group controllers and international tax teams.
The objective is not simply to calculate an annual tax return.
It is to make the Turkish tax position predictable, reconcilable and understandable to headquarters before the year closes.
Frequently Asked Questions
What is the corporate income tax rate in Turkey for 2027?
Under the legislation in force as of October 2026, the standard Turkish corporate income tax rate is 25%. Certain financial-sector companies are subject to a 30% rate. Specific reduced rates and incentives can apply to qualifying activities.
What is the 2027 manufacturing corporate tax rate in Turkey?
From the 2027 tax year, qualifying income derived exclusively from manufacturing activities by corporations holding an Industrial Registration Certificate and actually carrying out manufacturing activities is subject to a 12.5% corporate income tax rate, subject to the statutory conditions.
Is the corporate tax rate lower for exporters in Turkey?
Qualifying income derived exclusively from export activities can benefit from a five-percentage-point reduction in the applicable corporate income tax rate, subject to the relevant rules and limitations.
What is Turkey’s minimum corporate tax?
Turkey operates a domestic minimum corporate tax mechanism under which corporate tax cannot generally fall below an amount calculated at 10% of a specially determined income base before certain exemptions and deductions, subject to statutory exclusions and special rules.
Does the minimum corporate tax apply to newly established Turkish companies?
Under the current rules, newly established companies are generally outside the domestic minimum corporate tax for their first three accounting periods, subject to the statutory conditions. Certain reorganisations are not treated as new establishments for this purpose.
How long can corporate tax losses be carried forward in Turkey?
Under current Turkish corporate tax rules, qualifying corporate tax losses can generally be carried forward for five years. Corporate tax losses cannot generally be carried back.
What is the dividend withholding tax rate in Turkey?
Under the rules in force as of October 2026, dividends paid by a Turkish resident company to a non-resident company are generally subject to 15% withholding tax. An applicable double tax treaty may provide a lower rate where the relevant conditions are satisfied.
What is the tax rate for a Turkish branch of a foreign company?
Turkish branch profits are generally subject to Turkish corporate income tax. Under current rules, profit remitted by a Turkish branch to its foreign head office can also be subject to a 10% branch-profit withholding tax, potentially reduced under an applicable tax treaty.
Does Turkey have a 15% global minimum tax?
Yes. Turkey has implemented Pillar Two-based global minimum tax rules, including a domestic top-up tax framework, for qualifying multinational groups generally meeting the EUR 750 million consolidated-revenue threshold.
Does Turkey allow corporate tax group consolidation?
Turkey does not generally allow corporate income tax consolidation between group companies. Each Turkish company is ordinarily treated as a separate corporate taxpayer.
When is the Turkish corporate income tax return filed?
For a calendar-year taxpayer, the annual corporate income tax return is generally filed by the 30th day of the fourth month following the year-end, which ordinarily means 30 April.
Planning Your Turkish Corporate Tax Position for 2027?
2027 should not be modelled by simply applying 25% to accounting profit.
Manufacturing companies, exporters, multinational groups and companies using investment incentives can face several overlapping tax regimes. SystemsCPA helps foreign-owned businesses connect Turkish corporate tax with statutory accounting, ERP data, intercompany transactions and group tax reporting.
Discuss Your 2027 Turkey Corporate Tax Position →Important 2027 note: This article reflects Turkish legislation and published guidance available as of October 2026. Because 2027 is a future tax period, rates, thresholds, filing procedures and implementing guidance may change before or during 2027. Companies should confirm the rules applicable to their specific accounting period before making tax or investment decisions.
Disclaimer: This article provides general information and does not constitute tax, accounting, legal or investment advice. Corporate tax treatment depends on the company’s activities, legal structure, income composition, incentives, related-party transactions, applicable tax treaties and other facts.
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SYSTEMS CPA supports foreign-owned companies with company formation, accounting, tax compliance and payroll in Turkey — one accountable local partner. Reviewed by Evren Özmen, SMMM (Certified Public Accountant), TÜRMOB Reg. No. 35675.
