Corporate Tax in Turkey

Corporate income tax in Turkey applies to capital companies — including Limited Şirket (Ltd. Şti.) and Anonim Şirket (A.Ş.) — on their accounting profits after lawful adjustments. For foreign investors who open a company in Turkey or hold property through a Turkish entity, the standard rate is 25%, not the 9% figure often quoted in headlines. This guide explains 2026 rates, the 10% domestic minimum tax, Law No. 7582 manufacturing incentives, dividends, VAT, and how company ownership differs from personal ownership — without tax-avoidance framing. Confirm your structure with a qualified accountant.

This page covers corporate tax (kurumlar vergisi). Personal rent is on our rental income tax guide. Short-term letting permits are on short-term rentals (Law 7464). Purchase fees are in property purchase costs. Citizenship by investment is separate: Turkish citizenship through property.

Corporate Tax in Turkey: 2026 Overview

Turkish corporate tax is governed by the Corporate Tax Law (No. 5520), administered by the Revenue Administration (GİB). A company with its legal or business headquarters in Turkey is generally a full taxpayer on worldwide income. A non-resident company is taxed only on Turkish-source income (for example a branch operating in Turkey).

Resident companies file an annual corporate income tax return, pay quarterly advance tax, and maintain books under Turkish accounting standards. Rates and incentives change — the tables below reflect positions reported by PwC Tax Summaries and significant 2026 developments as of mid-2026.

Standard Corporate Income Tax Rate

The headline corporate income tax (CIT) rate is 25% for most companies. It applies to net taxable profit after permitted deductions and exemptions, subject to the minimum tax rule in the next section.

This is the rate that applies to ordinary trading and rental profits of a typical foreign-owned LTD — including net income from letting Turkish property held in the company name. It is not 9% and not 14%.

10% Minimum Corporate Tax

Since 1 January 2025, Turkey applies a domestic minimum corporate tax under Law No. 7524. Companies pay the higher of 25% CIT on taxable profit after deductions, or 10% on income calculated before certain deductions and exemptions. Certain participation and R&D items are excluded from the 10% base per PwC.

Financial Sector Rate

Banks, insurance companies, electronic payment institutions, and certain public–private partnership models are subject to a 30% CIT rate instead of 25%. Property-holding LTDs used by foreign investors generally fall under the 25% standard rate unless they conduct regulated financial activity.

Exporter and Manufacturing Incentives

Law No. 7582 (Official Gazette 4 June 2026) added 12.5% CIT on income exclusively from qualifying manufacturing (industrial registry + actual production) and agricultural production, from the 2027 tax year. Export profits may still qualify for a five percentage-point reduction under CIT Law Article 32/7 — not stackable with the 12.5% slice.

Why “9% Corporate Tax” Is Misleading

In early 2026, policy announcements referenced 9% CIT for manufacturer-exporters and 14% for other exporters. Those headline figures were not enacted in Law 7582 in that form. What entered into force is the 12.5% manufacturing/production rate (from 2027) plus existing export and service deductions — each with narrow conditions.

Ordinary LTD rental or property-holding income is taxed at 25% (subject to minimum tax), not at 9% or 12.5%, unless the company’s facts genuinely qualify for a specific incentive — which a residential landlord structure typically does not.

Rental Income Through a Turkish LTD

When a Turkish company owns and lets property, rent is generally business income taxed at 25% CIT on net profit after deductible expenses (maintenance, management fees, interest, depreciation where allowed). This differs from personal gayrimenkul sermaye iradı taxed on the owner’s annual income tax return — see our rental income tax guide.

If the tenant is a company, it must generally withhold 20% of gross rent under Income Tax Law Article 94; the landlord company credits this against annual CIT. Individual tenants on a home lease often do not withhold — but the LTD still declares rent in its corporate return.

Short-term tourism letting may trigger Law 7464 permit duties regardless of tax classification — see short-term rentals. Permit compliance and CIT are separate questions.

Dividends and Withholding Tax

After CIT, profit can remain in the company or be distributed. Dividends paid to non-resident shareholders (individuals or companies) are subject to 15% withholding tax under domestic law since 22 December 2024, unless a lower rate applies under a double taxation treaty (DTT). Dividends between two Turkish resident companies are generally not subject to dividend WHT.

Turkey has 80+ DTTs. Treaty relief requires residency certificates, beneficial ownership, and shareholding tests — rates often fall to 5–10% for qualifying corporate shareholders but vary by treaty. Branch profits remitted to a foreign head office may be subject to 10% WHT on the remittance (treaty-dependent), per PwC branch guidance — a different path from subsidiary dividends.

VAT, Accounting and Compliance

Companies engaged in taxable supplies must register for VAT (KDV). Standard rate is 20%; reduced 10% and 1% rates apply to specified goods and services. Residential rent by individuals is often VAT-exempt; commercial letting and hotel-style activity may attract VAT — classify activities with your accountant.

Ongoing obligations typically include: monthly or quarterly VAT returns, withholding tax returns on salaries and certain payments, SGK if employees are hired, annual CIT return (due by the end of the fourth month after year-end), and statutory books kept in Turkish. Foreign-owned companies use the same rules as domestic ones; filings are normally handled through a certified public accountant (SMMM/YMM).

Foreign Shareholders

Under the Foreign Direct Investment Law (4875), foreign investors may hold 100% of shares in most sectors. CIT rates do not rise because shareholders are foreign — the same 25% / 30% / minimum-tax rules apply. Foreign shareholders need a potential tax identification number for incorporation and bank onboarding, as described on Invest in Türkiye — establishing a business.

The 20-year foreign-source income exemption introduced by Law 7582 (GVK Article 20/D) applies to qualifying individuals only, not to companies. A foreign national who becomes tax resident may benefit personally on foreign income while their Turkish LTD still pays CIT on Turkish profits. See our 20-year foreign income tax exemption guide for GVK Article 20/D eligibility, covered income types, and certificate rules.

Company vs Personal Ownership

Buying property in a personal name versus a Turkish LTD is a structural choice — tapu transfer costs are similar, but tax treatment diverges at the income stage. Personal owners face progressive income tax on rent with a residential istisna; companies face 25% CIT with expense deductions and dividend WHT on extraction. Neither path is automatically cheaper; modelling requires numbers.

A future guide will cover buying property through a company in depth. Until then, treat company ownership as a compliance and repatriation question, not a headline-rate shortcut.

Common Mistakes

• Assuming 9% or 14% CIT applies to a property-holding LTD
• Confusing the individual 20/D foreign-income exemption with company tax
• Ignoring minimum corporate tax when projecting incentive-heavy returns
• Comparing personal rental istisna to corporate rent without dividend WHT
• Letting short-term without 7464 permit review while focusing only on CIT
• Distributing profits without modelling 15% dividend WHT (or treaty rate)
• Using a branch versus subsidiary without comparing remittance WHT and governance

Corporate Tax Rate Overview

Company vs Personal Ownership

Myth vs Reality

Frequently Asked Questions

Is corporate tax in Turkey 9%?
No. The standard corporate income tax rate is 25% for most companies. A 9% rate for manufacturer-exporters was discussed in 2026 policy announcements but was not enacted as a general corporate tax rate in Law 7582. Property-holding LTDs should not be described as paying 9% CIT on ordinary rent.

What is the standard corporate tax rate in Turkey?
25% on net corporate taxable income for most capital companies. Financial-sector entities are generally taxed at 30%. Both are subject to the domestic minimum tax comparison described above.

Does the 20-year foreign income exemption apply to companies?
No. Law 7582’s GVK Article 20/D exemption applies to qualifying natural persons who become Turkish tax residents, not to LTD or A.Ş. entities. A company’s Turkish-source profits remain fully within the corporate tax system.

How is rental income taxed in a Turkish LTD?
Net rental profit is included in the company’s corporate tax base and taxed at 25% (subject to minimum tax). Corporate tenants withhold 20% of gross rent. This differs from personal owners who file annual gelir vergisi — see our rental income tax page.

Do foreigners pay different corporate tax rates?
No. Foreign-owned Turkish companies use the same 25% / 30% rates and minimum-tax rules. Differences appear mainly on dividend withholding and treaty relief when profits leave Turkey.

What is dividend withholding tax in Turkey?
Dividends paid to non-resident individuals or companies are subject to 15% withholding tax under domestic law (from December 2024), unless a double taxation treaty provides a lower rate. Distributions between two Turkish resident companies are generally not subject to dividend WHT.

What is the minimum corporate tax?
From fiscal years starting 1 January 2025, companies pay the higher of (1) normal CIT at 25% on taxable profit after deductions, or (2) 10% on income calculated before certain deductions and exemptions. It prevents very low effective rates where large incentives apply.

Can a company buy property in Turkey?
Yes. A Turkish-registered LTD or A.Ş. may hold tapu on real estate. Acquisition costs resemble personal purchases (tapu harcı, etc.), but ongoing tax is corporate, not personal rental istisna. See our buying property through a company in Turkey guide for tapu, PDPC approval, and tax treatment.

When does the 12.5% manufacturing rate start?
Law 7582’s 12.5% rate on qualifying exclusive manufacturing and agricultural production income applies from the 2027 tax year onward for companies with an industrial registry certificate and actual production activity — not from 2026 for general company income.

Is a branch or an LTD better for tax?
Both pay 25% CIT on Turkish profits. A branch remits profits to headquarters subject to 10% WHT (treaty-dependent); a subsidiary distributes dividends at 15% WHT (treaty-dependent). Legal liability, governance, and repatriation differ — choose on full advice, not headline rates.

Does VAT apply to company rent?
Residential rent to individuals is often outside standard VAT charging; commercial property leases and tourism-style supplies may attract 20% VAT (or exemptions in specific cases). VAT registration is required when the company makes taxable supplies. Classify each activity with your accountant.