Türkiye: corporate tax guide

What the tax system covers

A corporation with its legal centre or business centre in Türkiye is fully liable on worldwide profits. A foreign-incorporated company may therefore remain within Turkish taxation where the actual business centre is there.

When a company becomes tax resident

GIB explains that a corporation with either its legal centre or business centre in Türkiye is fully liable on worldwide profits. The legal centre is the centre stated in the relevant constitutive documents. The business centre concerns where operations are actually concentrated and managed. A foreign registered office therefore does not conclusively establish foreign-only taxation. For an owner-managed business, identify who approves major contracts, financing, budgets and operational decisions after relocation. Compare that factual record with the company’s constitution, directors and premises. A genuinely foreign company can still have Turkish-source income through local operations or a permanent establishment. The company’s liability, its shareholder’s receipts and any transfer-pricing obligations must be analysed separately.

Rates and the tax base

25% ordinary corporate income tax. The 2026 rate is 25% for ordinary companies and 30% for specified financial and other listed sectors. Qualifying reductions, incentives and minimum-tax rules require separate calculations.

Outbound dividends, interest and royalties

Dividends: 15%. The published GIB table applies 15% to covered distributions to a nonresident corporation from 22 December 2024 under Decision 9286. Dividends received through a Turkish permanent establishment/agent and specifically excluded profits require separate treatment; capitalizing profit is not itself a distribution.

Interest: 10% ordinary loans; 0% qualifying financial lenders. Ordinary foreign-credit interest is 10%. Qualifying foreign states, international institutions, banks and authorized lenders that lend to the public rather than solely affiliates can receive 0%; specified supplier-credit differences are 5%. Deposits, securities and participation-bank returns have separate instrument and date rules.

Royalties: 20%. Covered intangible-right payments to a nonresident corporation are subject to 20% under the published Article 30 rate table. Software purchases, bespoke development and a licence of reproduction or exploitation rights require separate characterization; treaty relief is not assumed.

CFC rules aggregate control and require several conditions

The statutory control test uses at least 50% of capital, dividend rights or voting rights held directly or indirectly by fully liable individuals and companies, separately or together. The highest relevant control during the period matters. Splitting interests between resident owners does not necessarily avoid the rule; GIB’s examples expressly aggregate corporate and individual interests.

Article 7 also tests at least 25% passive gross income, a foreign income/corporate tax burden below 10%, and gross revenue above the statutory TRY100,000 equivalent threshold. These conditions operate together. The law then addresses inclusion in a fully liable corporate shareholder’s tax base according to its participation. Distinguish people counted for control from the taxpayer receiving the attribution, and review the individual rules separately. Later distributions require checking for amounts already taxed.

Review management migration and final eligible earnings

A company with its legal centre in Türkiye does not become foreign merely because its owner moves. Where the business centre changes, record the actual transfer of authority, staff and functions and review any local establishment that remains. Corporate liquidation or migration requires its own accounting and tax work; it is not equivalent to a personal change of address.

If the business claims the services deduction, track final eligible earnings and the required transfer to Türkiye by the relevant return deadline. Departure should not disrupt the records or banking needed to complete those conditions. Review foreign holdings and retained profits under the applicable CFC framework. This guide makes no blanket assertion of tax-free departure: identify the individual, company and transaction consequences separately and model the destination’s treatment before arrival.

Services businesses should investigate the current deduction precisely

GIB’s current Income Tax Law page records Decision 11257 increasing the relevant service-income deduction to 100%. The underlying provision is limited to specified activities, overseas customers and qualifying use, with a requirement to bring the relevant earnings to Türkiye by the return deadline. The corporate provision has a corresponding deduction. It should not be described as zero tax for every online business or freelancer.

Software, design and other listed activities may merit a detailed review, while ordinary trading, an unlisted service or a domestic customer cannot simply borrow the same treatment. Analyse the contract, actual deliverable, customer and where the benefit is used. Distinguish income or corporate tax from VAT, payroll, social contributions, distribution taxes and any minimum-tax interaction. The commercial collection process must be capable of meeting the remittance and evidence conditions.

A software invoice is not always a royalty

The Revenue Administration’s 25 December 2023 ruling distinguishes acquiring standard software for unchanged use or resale from acquiring exploitation rights. The former is considered under business-income treatment; a bespoke development payment is considered as professional-service income; a licence permitting reproduction, modification, distribution or comparable copyright exploitation is considered as a royalty. The legal rights in the contract matter more than the invoice heading.

For the domestic nonresident-corporation starting point, the ruling identifies 20% withholding for the covered professional-service and royalty categories. Its treaty discussion is specific to the stated recipient and facts, so it should not be generalized to every foreign supplier. Document the deliverables, source-code and reproduction rights, work location, recipient residence and any Turkish establishment before deciding that an ordinary product purchase or service carries no deduction.

The public GIB rate table also distinguishes ordinary foreign-loan interest from bank deposits and securities. A financing arrangement with a related company does not meet the zero-rate lender category merely because that company calls itself a finance company: the listed category requires the relevant authorization and lending to persons beyond its affiliated group. Keep the lender’s regulatory status and actual business evidence with the loan file.

Foreign companies and income attribution

At least 50% aggregated control plus passive-income, foreign-tax-burden and revenue conditions; identify owners counted for control separately from corporate profit attribution.

Departure, migration and continuing obligations

No blanket no-exit-tax conclusion; company, property and ongoing source income require review.