Why it was introduced
The domestic minimum tax came in with Law No. 7524, published in August 2024, alongside Türkiye's Pillar Two global minimum tax rules. Its aim is to ensure that companies with large exemptions or incentives still pay a basic level of corporate tax.
How the calculation works
Regular calculation. Take commercial profit, adjust it for non-deductible expenses, subtract exemptions, deductions and losses, and apply the 25% rate (or a reduced rate where one applies).
Minimum calculation. Take profit before the exemptions and deductions that the law does not protect, and apply 10%.
Compare. The company pays whichever figure is higher.
For a company with few exemptions, the regular 25% calculation will almost always be higher, so nothing changes in practice. The minimum tax matters when the regular calculation drops a company's effective rate well below 10%.
Who is most affected
Companies with large participation or capital gains exemptions.
Companies using significant deductions, such as notional interest on cash capital.
Companies carrying forward large tax losses.
Companies benefiting from reduced-rate incentives, depending on whether the incentive is protected.
The law protects certain items from the minimum tax calculation — for example some incentive-related exemptions and R&D benefits — so the effect depends on which benefits a company uses. This is the part that needs a case-by-case review.
Newly established companies are exempt from the minimum tax for their first three accounting periods, including the period in which they start operations.
How it differs from the global minimum tax
| Domestic minimum tax | Global minimum tax (Pillar Two) | |
|---|---|---|
| Who it applies to | All corporate taxpayers | Groups with consolidated revenue of EUR 750 million or more |
| Rate | 10% of profit before certain exemptions | 15% effective tax rate per jurisdiction |
| Start | 2025 | IIR from 2024, UTPR from 2025; 15% domestic top-up tax |
| Basis | Turkish tax rules | Group financial statements (GloBE rules) |
A large multinational may be subject to both: the domestic minimum tax on the Turkish company's own return, and the Pillar Two rules at group level.
What to do now
Run both calculations in your advance tax and year-end models.
Review whether your exemptions, incentives and losses are protected.
Check the effect on the timing of planned capital increases, asset sales or restructurings.
For large groups, align the Turkish figures with the group's Pillar Two reporting.
Frequently asked questions
Does the minimum tax apply to loss-making companies?
A company with no profit before the relevant adjustments has no minimum tax base. The rules bite when a company has profit but its exemptions and deductions reduce taxable income sharply.
Is it applied to advance tax payments?
Yes. The minimum tax is also taken into account in quarterly advance (provisional) tax calculations.
Does it change the 25% rate?
No. The standard rate stays at 25% (30% for financial companies). The minimum tax is a floor, not a new rate.
Check your exposure.
Our Tax Advisory team can model the regular and minimum tax side by side for your company.
This page provides general information and is not legal or tax advice. Every situation is different; talk to us before you act.