Türkiye’s new corporate tax law to increase company taxes by over $1,500
Lawmakers are seen during a session at the Turkish Parliament, in Ankara, Türkiye, June 22, 2023. (AA Photo)
The ruling AK Party has introduced a new bill to Parliament that proposes changes to the domestic minimum corporate tax. Under the new law, a company with a ₺1 million ($30,211.57) profit will pay an additional ₺50,000 in taxes.
- Current law: A company with a ₺1 million profit and an ₺800,000 capital gains exemption currently pays ₺50,000 in corporate tax on the remaining ₺200,000 at a 25% rate.
- New law: The same company will now pay tax on 10% of its gross profit before any exemptions or deductions, resulting in a total corporate tax of ₺100,000, doubling its tax liability.
Exemptions for new companies
The new law will not apply to companies in their first three fiscal periods, allowing new businesses to grow without the additional tax burden. The 10% tax rate for the minimum corporate tax can also be adjusted by the president based on sector, activity, or industry, ranging from zero to double the standard rate.
Exempted entities
Certain entities will be exempt from this minimum corporate tax, including:
- Public institutions
- Non-profit organizations
- Retirement investment funds
- Real estate investment funds
