Taxes at company level
| Tax | Rate or rule | Legal basis |
|---|---|---|
| Corporate tax | General rate 25% | Corporate Tax Law Art. 32 (Law No. 7456) |
| Domestic minimum corporate tax | Tax calculated may not be less than 10% of profit before deductions and exemptions (2025 onwards) | Corporate Tax Law Art. 32/C (Law No. 7524) |
| Advance tax | Payments during the year on periodic profits | Corporate and Income Tax Laws |
| VAT | Charged on sales, deducted on purchases | VAT Law |
| Payroll taxes | Income tax and stamp duty on staff salaries | Income Tax Law, Stamp Duty Law |
The corporate tax rate may differ for certain sectors and transactions. Current rates should be checked in the table published by the Turkish Revenue Administration (GİB).
Dividend distribution: 15% withholding
When after-tax profit is distributed, dividend withholding tax applies. Under Presidential Decree No. 9286, the rate has been 15% since 22 December 2024. It also covers distributions to individuals and companies resident abroad.
| Example (no tax treaty applied) | Amount |
|---|---|
| Dividend distributed to the foreign shareholder | TRY 1,000,000 |
| Dividend withholding tax (15%) | TRY 150,000 |
| Net amount paid to the shareholder | TRY 850,000 |
Double tax treaties
Turkey has double tax treaties with many countries. These may set a lower maximum rate for dividend withholding than domestic law. To apply the treaty rate, the following are usually required:
- the foreign shareholder is resident in the treaty country,
- a certificate of residence proving this is submitted,
- the treaty's other conditions (for example a minimum shareholding) are met.
Rates and conditions differ from treaty to treaty, so the treaty with the shareholder's country should be reviewed before distribution. Whether tax paid in Turkey can be credited in the shareholder's own country depends on that country's law.
Other payments between the company and its shareholders
Salary
A salary paid to a foreign shareholder who actually works in the company goes through payroll. Whether the shareholder is a Turkish resident determines whether they are a full or limited taxpayer and the scope of taxation. A work permit is also required to work in Turkey.
Shareholder loans
Loans from shareholders or related companies are subject to the thin capitalisation and transfer pricing rules of the Corporate Tax Law. The amount, interest rate and agreement should be set within these rules.
Related-party transactions
For services, licences and management fees charged by group companies, the arm's-length nature of the price must be documented. Some service and licence payments made abroad may also be subject to withholding tax.
Checklist
- Are corporate tax and the domestic minimum corporate tax being calculated?
- Has the tax treaty with the shareholder's country been reviewed before distributing profits?
- Has a certificate of residence been obtained?
- Are payments to shareholders correctly classified as salary, dividend or loan?
- Is the arm's-length nature of related-party transactions documented?