A Turkish company's core taxes are corporate income tax, value added tax (VAT) and dividend withholding tax. As of 2026 the headline corporate income tax rate is 25% for most companies, with a higher 30% rate applying to banks and financial institutions. Corporate tax is charged on the company's worldwide profit if it is resident in Türkiye.
Since 1 January 2025 a domestic minimum corporate tax also applies. In practice the company computes its liability two ways — the standard 25% on taxable profit after deductions and exemptions, and a parallel 10% on profit before certain deductions and exemptions — and pays whichever is higher. The rule is designed to stop heavy use of incentives from reducing tax below a floor, and it mainly affects companies with large exemptions rather than ordinary trading businesses.
VAT (KDV) applies to most goods and services. The standard rate is 20%, with reduced rates of 10% and 1% for specific categories such as certain foodstuffs and other listed items. VAT is generally neutral for a business: you charge it on sales, deduct the VAT you pay on purchases, and remit the difference. Exports are typically zero-rated, and exporters can reclaim input VAT — a meaningful cash-flow advantage for outward-facing companies.
When the company distributes profit to its shareholders, a dividend withholding tax applies. This rate was increased to 15% with effect from late December 2024. For a foreign shareholder, that 15% can be reduced — often to 5%–15% — where a double-taxation treaty between Türkiye and the shareholder's country provides a lower rate, provided the paperwork is in order.
There are other, smaller taxes to keep in view. Stamp tax applies to many contracts and official documents; withholding tax applies to certain payments such as rent, professional services and payments to non-residents; and if you employ staff, income tax withholding and social-security (SGK) contributions arise on payroll. Municipalities also levy some local charges.
The compliance calendar matters as much as the rates. The annual corporate tax return is filed and paid by the end of the fourth month after the accounting year — 30 April for a calendar-year company — but tax is collected throughout the year via provisional (advance) corporate tax, calculated on a quarterly basis. VAT and withholding returns are filed monthly. Missing these deadlines triggers penalties and interest, so ongoing bookkeeping is essential rather than a year-end task.
One distinction shapes everything above: tax residency. A company incorporated in Türkiye, or effectively managed from there, is treated as resident and taxed on its worldwide income, whereas a non-resident company is taxed only on its Turkish-source income. For a foreign founder setting up a local entity, that entity is Turkish-resident, so its global profit falls within scope — a reason to plan any foreign branches or cross-border structures deliberately rather than leaving them to chance.
Finally, incentives can change the effective rate. Companies in free zones or technology development zones may pay little or no corporate tax on qualifying income, and reduced-rate corporate tax is available under investment incentive certificates. Whether these apply depends on your activity, location and documentation — which is exactly the analysis a mali müşavir performs before you commit to a structure. Rates and thresholds are updated regularly, so any figure here should be confirmed for your specific year and circumstances.