Update Incentives
Türkiye’s 2026 tax reform, designed to position the country as a logistics and financial hub, is now law. It came in two steps. Presidential Decree No. 11257, published on 30 April 2026, raised the service export deduction from 80% to 100% and eased the exemptions for foreign dividends and participation earnings, for income earned from 1 January 2026, provided the earnings are brought to Türkiye. Law No. 7582, published in the Official Gazette on 4 June 2026, then enacted the rest of the package: near-full deductions for transit trade, a Qualified Service Center regime for regional headquarters, longer Istanbul Financial Center (IFC) incentives and a 20-year exemption on foreign-source income for new residents.
Update Immigration & relocation
Law No. 7582 gives individuals who become Turkish tax residents a full 20-year exemption from Turkish tax on their foreign-source income, together with a flat 1% inheritance tax. There is no fee and no minimum investment. To qualify, you must not have had a domicile or a tax liability in Türkiye in the previous three calendar years. The exemption is not automatic: you must obtain an Exemption Certificate from your tax office within a short deadline, or the right is lost.
Company set-up
The rules and regulations to follow when establishing a company in Türkiye.
Update Incentives
The Istanbul Financial Center (IFC) in Ataşehir is a financial district with its own law, Law No. 7412. Businesses that lease office space there and obtain a Participant Certificate can deduct 100% of qualifying financial service export income from their corporate tax base until 2047, pay no BSMV, stamp duty or fees on those transactions, and offer qualifying expatriate staff a 60–80% income tax exemption. Law No. 7582 of May 2026 extended these benefits and added a Qualified Service Center regime for regional headquarters and group service functions. The certificate is a gateway to incentives; it does not replace a banking, capital markets or payments licence.
Company set-up
The main cost of a Turkish company is its minimum capital: TRY 50,000 for a limited company (LLC) and TRY 250,000 for a joint stock company (JSC). On top of that come one-off registration costs — notary, trade registry, translations and adviser fees — and monthly running costs such as accounting and a registered address. Capital is not a fee: it stays in the company and can be used for its business.
Incentives
The Istanbul Financial Center is Türkiye's flagship project — how to invest and set up operations there.
Company set-up
Most foreign investors choose a limited liability company (Ltd. Şti.): it needs less capital (TRY 50,000) and is simpler to run. A joint stock company (A.Ş.) needs TRY 250,000 but makes share transfers easier and is the only form that can list on Borsa Istanbul, so it suits larger investments, many shareholders or a planned exit.
Company set-up
Yes. With a notarised and apostilled power of attorney, a Turkish adviser can obtain your tax number, sign the articles of association, register the company and open most of the paperwork on your behalf. You may still need to be present, or sign in person at a Turkish consulate, for some bank account openings.
Incentives
Service export incentives for gaming and IT companies under Presidential Decree No. 10962.
Update Corporate & international tax
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.
Corporate & international tax
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.
Immigration & relocation
One of the most comprehensive international tax incentives for individuals moving to Türkiye.
Employment & payroll
To hire a foreign national in Türkiye, the employer applies for a work permit online through the Ministry of Labour's e-İzin system before the person starts work. The Ministry generally expects the employer to have at least five Turkish employees per foreigner, a minimum level of capital, sales or exports, and to pay a salary above a set multiple of the minimum wage. Once issued, the work permit also serves as the employee's residence permit.
Immigration & relocation
If you will work in Türkiye — as an employee, manager on the payroll or self-employed professional — you need a work permit, and a valid work permit also counts as your residence permit. If you will live in Türkiye without working here (for example as an investor, property owner, retiree or family member), you need a residence permit. A residence permit alone does not allow you to work.
Immigration & relocation
Who qualifies and how the 20-year exemption on foreign-source income works.
Property & citizenship
Foreigners can obtain Turkish citizenship for themselves, their spouse and children under 18 by making one qualifying investment — most often real estate worth at least USD 400,000 or a USD 500,000 bank deposit, bond, fund or capital investment — and keeping it for at least three years. Türkiye allows dual citizenship, so most applicants keep their original passport.
Company set-up
A subsidiary (a Turkish limited or joint stock company) is a separate legal entity that ring-fences the parent's liability; a branch is part of the foreign parent, so the parent is fully liable for its debts. Both pay 25% corporate tax on Turkish profits and 15% withholding when profits go abroad (reducible by treaty). Most foreign investors choose a subsidiary; a branch suits single projects or businesses that must stay on the parent's balance sheet.
Corporate & international tax
The current corporate income tax framework.
Incentives
Türkiye offers two main routes for R&D and software companies. A company located in a technology development zone (technopark) can earn software and R&D profits free of corporate tax, and its R&D staff are exempt from income tax until the end of 2028. A company that sets up a certified R&D centre (at least 15 full-time R&D staff) can deduct 100% of qualifying R&D spending and get large payroll tax exemptions wherever it is located.
Employment & payroll
In Türkiye the employer pays social security (21.75%) and unemployment insurance (2%) on top of the gross salary, up to a monthly ceiling of TRY 297,270 in 2026. On a gross salary of TRY 100,000, the employer's cost is about TRY 123,750 before any premium incentive. The employee receives about TRY 76,000 net in January, falling slightly later in the year as income tax brackets rise.
Corporate & international tax
The YMM (sworn-in CPA) certification requirement for exemptions and deductions, including for new companies.
Employment & payroll
An employee with at least one year of service who is dismissed without just cause (and in a few other cases) is entitled to severance pay (kıdem tazminatı) of 30 days' gross pay for each year of service. The amount per year is capped at a ceiling that is revalued twice a year. Severance pay is exempt from income tax up to the ceiling and subject only to stamp tax. It is separate from notice pay and unused annual leave.
Property & citizenship
Most foreigners can buy property in Istanbul with a Turkish tax number, a passport and a licensed valuation report; no residence permit is needed. The transfer is completed at the land registry (tapu) office and can be done within days once checks are complete. Budget for a 4% title deed fee (usually split between buyer and seller), annual property tax and, if you resell within five years, tax on the gain.
Corporate & international tax
The core compliance obligation for Turkish subsidiaries of foreign companies.
VAT & compliance
A Turkish company files something almost every month, even with no revenue. The core monthly cycle is the combined withholding and social security return by the 26th, the reverse-charge VAT return (KDV-2) by the 25th, the VAT return by the 28th, and e-ledger uploads by their deadlines. On top come quarterly advance tax returns and the annual corporate tax return by 30 April. Deadlines that fall on a weekend or public holiday move to the next working day.
Update Corporate & international tax
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.
Corporate & international tax
The exemption was cut from 75% to 50% — relevant for holding structures and exit planning.
VAT & compliance
Exports of goods and services from Türkiye are exempt from VAT, but the exporter can recover the VAT it paid on related purchases. The refund is claimed through the VAT return and can be taken as an offset against other tax debts or paid in cash. Small claims are processed with standard documents; larger claims need a sworn financial advisor (YMM) report, a tax inspection report or a bank guarantee.
Corporate & international tax
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.
Immigration & relocation
Most refusals come down to a few avoidable problems: an address in a neighbourhood closed to new foreign residents, a purpose that does not match the documents, insufficient proof of income or health insurance, or an application filed too late. After a refusal you can object or go to court within the legal time limit, or file a new, stronger application — but you must also make sure you do not overstay.
VAT & compliance
Turkish companies must issue invoices and keep their books electronically through the Revenue Administration's (GIB) systems once they meet the relevant conditions. A company becomes obliged to use e-invoice when its gross sales exceed the turnover threshold set by GIB, or immediately if it works in certain sectors. The e-ledger is mandatory for e-invoice users and, from 1 January, for companies required to keep their books on the balance-sheet basis. Once obliged, the company has a fixed period — normally until the start of a following month set by the rules — to switch.
Update Corporate & international tax
Each January, Türkiye updates the figures that drive payroll and tax: the minimum wage, income tax brackets, social security floor and ceiling, and dozens of TRY thresholds revalued by the annual revaluation rate. In 2027 there is also a structural change: income from manufacturing and agricultural production is taxed at 12.5% instead of 25%.
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