International Tax Planning
Turkish corporate tax, double tax treaties, and investment incentives — structured for your cross-border operation
The Turkish corporate tax landscape in 2026
Standard corporate income tax (CIT) rate: 25%, effective from 1 January 2023. Source: EY Global Tax Alert — * https://www.ey.com/en_gl/technical/tax-alerts/tuerkiye-s-new-law-increasing-the-corporation-tax-rates-enters-i
Financial institutions (banks, factoring companies, finance companies, insurance companies): 30%. *https://www.ey.com/en_gl/technical/tax-alerts/tuerkiye-s-new-law-increasing-the-corporation-tax-rates-enters-i
Dividend withholding tax — payments to non-resident shareholders: 15% standard. Reduced rates under applicable double taxation treaties — in many cases to 5% or 0%. *Source: https://www.gib.gov.tr/uluslararasi-mevzuat
Capital gains: Gains from the sale of participations held for at least two years may be 75% exempt from CIT under certain conditions. *Source: https://taxsummaries.pwc.com/turkey/corporate/taxes-on-corporate-income
Software and R&D export income: Companies exporting software or technology services may deduct 50%–80% of qualifying export profit from CIT taxable income. *Source: https://vergimerkezi.com.tr/turkey-tax-guide-foreigners-2026/
Technology Development Zones (Technoparks — Teknoloji Geliştirme Bölgesi): Income generated from software development and R&D activities carried out within a licensed Technopark is exempt from CIT until end of 2028. *Source: https://www.sanayi.gov.tr
Free Zones (Serbest Bölgeler): Companies operating within a designated Free Zone may be exempt from CIT on income derived from exports and certain manufacturing activities. Türkiye has 18 active Free Zones. *Source: https://www.serbest.ticaret.gov.tr
Double taxation treaties (DTTs)Türkiye has concluded double taxation agreements with over 85 countries as at 2026. These treaties can reduce or eliminate withholding taxes on dividends, interest, and royalties paid between treaty partners. Source: https://www.gib.gov.tr/uluslararasi-mevzuat Key treaty partners include Germany, the UK, the USA, Netherlands, France, UAE, and Ireland. For Irish-Turkish cross-border structures (which is a common scenario for K&L Global clients), the Ireland–Turkey DTT is relevant for determining the withholding tax rate on dividends and the tax residency of directors. |
K&L Global advises on:
Which treaty applies to your shareholders' and directors' country of residence
The reduced withholding rates available under treaty
Whether the treaty includes a Limitation on Benefits (LoB) clause that might affect your structure
The interaction with the Turkish domestic participation exemption
Investment Incentive Certificate (Yatırım Teşvik Belgesi — YTB)
The Turkish investment incentive system provides CIT reductions, VAT exemptions on capital goods, import duty exemptions, and social security contribution support for qualifying investments. The incentive level depends on: the investment region (six regions, with Region 6 — eastern Türkiye — offering the most generous terms), the investment sector, and the investment amount.
A Yatırım Teşvik Belgesi (YTB) is issued by the Ministry of Industry and Technology (Sanayi ve Teknoloji Bakanlığı). K&L Global advises on eligibility and the application process.
Source: https://www.sanayi.gov.tr/merkez-birimi/b94224510b7b/destekler/yatirim-tesvik-uygulamalari
Transfer pricing
Turkish transfer pricing rules, set out in Article 13 of the Corporate Tax Law, require transactions between related parties to be priced on an arm's-length basis. Companies with cross-border related-party transactions above the annual threshold must prepare transfer pricing documentation and disclose related-party transactions in their annual CIT return (Form 2 attached to the Kurumlar Vergisi Beyannamesi).
K&L Global advises on transfer pricing policy for cross-border service, management fee, and royalty arrangements between Turkish entities and their foreign group companies.