+90 212 951 01 31 info@level-international.com Istanbul · Şişli
level-international.com ↗ EN
Doing Business in Türkiye by Level International
Corporate & international tax

What changes in 2027 for manufacturers: the 12.5% corporate tax rate

Last updated September 2026 2 min read By Level International
Short answer Starting with earnings for 2027, income derived from manufacturing activities (and agricultural production) will be taxed at 12.5% instead of the standard 25%. Today, manufacturers holding an industrial registry certificate get a 1-point reduction. The new rate applies only to income from manufacturing itself, so companies that also trade, provide services or earn financial income will need to separate those streams.

Today vs 2027

2026 From 2027 earnings
Standard rate 25% 25%
Manufacturing income 1-point reduction for industrial registry holders 12.5%
Export income 5-point reduction Check how the two reductions interact
Domestic minimum tax 10% floor Still applies; check how it interacts with the new rate

Who is likely to qualify

  • Companies that actually manufacture in Türkiye, typically with an industrial registry certificate.

  • Only the portion of income that comes from manufacturing activity.

  • Agricultural producers for income from agricultural production.

Secondary legislation will set the detailed conditions, such as how manufacturing income is identified and what documentation is required. Watch for these before the 2027 advance tax periods.

Why income separation matters

Many manufacturers also sell imported goods, provide installation or maintenance services, earn rent or interest, or receive foreign exchange gains. If only manufacturing income gets 12.5%, the company must:

  1. Map its revenue streams and the costs attributable to each.

  2. Decide an allocation method for shared costs such as administration and financing.

  3. Set up the accounting to show manufacturing profit separately.

How to prepare in 2026

  • Check your industrial registry certificate and capacity report are valid and match what you produce.

  • Model the 2027 effective rate, including export reductions, incentive certificates and the 10% minimum tax.

  • Review group structure: a trading company and a manufacturing company in the same group may benefit from different rates, which makes transfer pricing between them more important.

  • Plan the timing of investments and capital increases, since incentives and notional interest deductions interact with the rate.

Frequently asked questions

Does 12.5% apply to 2026 profits?

No. It applies from earnings for 2027 onwards.

Is the rate automatic?

It applies to qualifying manufacturing income, but companies should expect to prove which income is manufacturing income.

Will this affect advance tax?

Yes. Quarterly advance tax for 2027 will be calculated using the applicable rates, so planning should start before the first 2027 quarter.

Manufacturing in Türkiye?

Our Tax Advisory team models your 2027 effective tax rate and sets up the income separation now.

Book a tax review

This page provides general information and is not legal or tax advice. Every situation is different; talk to us before you act.

Keep reading
All publications
Corporate & international tax

Türkiye's 10% domestic minimum corporate tax explained

From 2025, a Turkish company's corporate tax cannot be lower than 10% of its profit calculated before certain exemptions and deductions. Companies compute tax twice — under the normal 25% rules and under the 10% minimum — and pay the higher amount. It mainly affects companies that use exemptions, deductions or reduced rates heavily.

September 2026 · 2 min read
Corporate & international tax

Paying a foreign supplier from Türkiye: withholding tax and reverse-charge VAT

When a Turkish company pays a non-resident for services, royalties, rent or interest, it may have to withhold Turkish tax (usually 10% to 20%) from the payment and pay it to the tax office. For services used in Türkiye, it must also calculate 20% VAT itself under the reverse-charge mechanism — and, once that VAT has been paid, can deduct it on its regular VAT return. A double tax treaty can reduce or remove the withholding.

September 2026 · 3 min read
Corporate & international tax

Transfer pricing documentation: what Turkish subsidiaries must file

Every Turkish company that deals with related parties must price those transactions at arm's length. Turkish corporate taxpayers with related-party transactions are subject to transfer pricing documentation requirements. Depending on the taxpayer and the nature of the transaction, these may include the annual transfer pricing form, an annual transfer pricing report, the General Report (Master File), the country-by-country (CbC) notification form and/or the CbC report. Profits shifted through non-arm's-length prices are treated as disguised profit distribution, taxed again and penalised.

September 2026 · 3 min read