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.
Since 2005, Maximos Real Estate has worked with foreign buyers and investors across Antalya and Istanbul on more than 800 completed transactions, including buyers who hold property through Turkish company structures.
This page covers corporate tax (corporate income tax (kurumlar vergisi)). Personal rent is on our rental income tax guide. Personal property sale gains are on our capital gains 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.
Why Investors Ask About Corporate Tax Before Buying Property
Most foreign investors reach this page while weighing one decision: buy in their own name, or buy through a Turkish company? The question usually comes up when someone moves past a single holiday flat toward rental income or a portfolio of several properties. A company can look like the tidy answer — one entity holding everything, easier to pass on — though transferring company shares after death follows separate inheritance rules (see our property inheritance in Turkey guide) — and (many assume) some protection for the assets inside it. Investors also ask what happens to the money: once rent is earned inside a company, how do they get it back out, and what does that cost? These are the real questions behind “how much is corporate tax?” — and the honest answer depends less on the headline rate than on how the company is run and how profits eventually leave it.
Corporate Tax in Turkey: 2026 Overview
Turkish corporate tax runs under the Corporate Tax Law (No. 5520), administered by the Revenue Administration (GİB), Turkey’s national tax authority. The basic split is about where the company is based: a company headquartered in Turkey is a full taxpayer on its worldwide income, while a non-resident company is taxed only on what it earns inside Turkey — for example, a branch operating here.
Resident companies file an annual corporate tax return, pay quarterly advance tax, and keep their 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%. Company-held tapu also carries annual property tax in Turkey (emlak vergisi) each year, separate from CIT on rental profit.
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, the rent is business income, taxed at 25% CIT on the net profit after deductible costs (maintenance, management fees, interest, and depreciation where allowed). That is a different system from personal rental income (gayrimenkul sermaye iradı), which goes on the owner’s own annual income tax return — see our rental income tax guide.
If the tenant is itself a company, it generally withholds 20% of the gross rent under Income Tax Law Article 94, and the landlord company credits that against its annual CIT. A private tenant on a home lease usually withholds nothing — but the company still has to declare the rent in its corporate return either way.
Short-term tourism letting can trigger Law 7464 permit duties whatever the tax classification — see short-term rentals. Permit compliance and CIT are separate questions.
What We Typically See With Property-Holding Companies
What we typically see is that investors arrive convinced a company will automatically save them tax. In practice it often does not. A company suits some situations — usually a portfolio of several properties, or an owner who plans to reinvest rather than take the money out — but it carries running costs that get overlooked early on. A common misunderstanding is that the company is set up once and forgotten: in reality it needs monthly bookkeeping, an accountant, annual filings and VAT handling whether it holds one flat or ten, and those costs do not shrink for a small portfolio. It earns its keep when one entity holds several properties and the admin is spread across them. And since most of our company owners live abroad, getting profit out matters as much as the rate — money inside a Turkish company is not money in your pocket. None of that makes a company wrong; it makes it a decision to model with numbers, not assume.
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 can own 100% of a Turkish company in most sectors. Being foreign does not raise the tax rate — the same 25% / 30% and minimum-tax rules apply as for a Turkish-owned company. Each foreign shareholder does need a potential tax identification number to incorporate and open the company’s bank account, as set out on Invest in Türkiye — establishing a business.
One point that confuses investors: the 20-year foreign-income exemption brought in by Law 7582 (GVK Article 20/D) is for qualifying individuals only — never companies. A foreign national who becomes Turkish tax resident may benefit personally on their foreign income, while their Turkish company still pays CIT on its Turkish profits as normal. See our 20-year foreign income tax exemption guide for who qualifies, which income counts, and the certificate rules.
Company vs Personal Ownership
Buying in your own name or through a Turkish company is a structural choice. The transfer costs at the Title Deed are similar either way; the difference shows up later, on the income. A personal owner pays progressive income tax on rent but gets the residential exemption (istisna); a company pays 25% CIT, deducts its expenses, but then faces dividend withholding when you take the profit out. Neither route is automatically cheaper — it comes down to the numbers in your specific case.
For the full mechanics of holding property in a company, see our guide to buying property through a company. The key mindset: treat company ownership as a compliance and profit-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
| Category | 2026 position | Notes |
|---|---|---|
| Standard CIT | 25% | Most LTD/A.Ş. profits, including ordinary rental |
| Financial sector CIT | 30% | Banks, insurance, e-payment institutions, certain PPP entities |
| Domestic minimum tax | 10% of broader base | Pay higher of standard CIT or minimum; from 2025 fiscal years |
| Manufacturing / agricultural (7582) | 12.5% | Exclusive production income; industrial registry + actual production; from 2027 tax year |
| Export profit reduction (Art. 32/7) | 5 pp off applicable rate | Qualifying export income; not stackable with 12.5% slice |
| Announced 9% / 14% exporter CIT | Not enacted as general rates | Do not quote as current law |
| Dividend WHT (non-resident) | 15% domestic | Reducible under DTT; resident company-to-company generally 0% |
| Branch remittance WHT | 10% domestic | On profit transferred to foreign HQ; treaty-dependent |
Company vs Personal Ownership
| Topic | Personal owner | Turkish LTD / A.Ş. |
|---|---|---|
| Tax on rent | Progressive gelir vergisi (GVK) | 25% CIT on net profit |
| Residential istisna | Yes — annual threshold (e.g. €1.160 for 2026 income year) | No — corporate rules apply |
| Expense deductions | Actual or lump-sum (GVK Art. 74) | Business expenses per commercial books |
| Tenant withholding | 20% if corporate tenant (credit on return) | 20% if tenant is a company |
| Profit extraction | N/A — income is yours | 15% dividend WHT (treaty may reduce) |
| 7582 foreign-income 20/D | Qualifying individuals only | Not available to companies |
| Formation | Direct tapu in personal name | Company formation then company holds tapu |
Myth vs Reality
| Claim | Reality (2026) |
|---|---|
| “Corporate tax in Turkey is 9%” | False as a general rate. Standard CIT is 25%. 9% was discussed in policy announcements but not enacted as a blanket exporter rate. |
| “Every exporter pays 14% CIT” | False as enacted general law. Export incentives exist but are conditional; 14% was not legislated as described in headlines. |
| “My LTD pays 12.5% on rent” | Usually false. 12.5% applies to qualifying manufacturing/agricultural production income from 2027 — not ordinary property rent. |
| “7582 gives companies 20 years tax-free foreign income” | False. GVK 20/D is for individuals meeting residency and three-year tests. |
| “Foreigners pay higher CIT” | False. Same statutory rates; withholding and treaties affect distributions, not the 25% base rate. |
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.
