What is Kurumlar Vergisi?

Kurumlar Vergisi (KV) is the cornerstone of Turkish business taxation, governed by the Corporate Tax Law No. 5520. It applies to resident companies on their worldwide income and to non-resident companies on their Turkish-source income only.\n\n**Who pays**\nAll capital companies (Limited Sirket and Anonim Sirket), cooperatives, state economic enterprises, and business associations with separate legal personality are subject to Kurumlar Vergisi. Sole traders and partnerships pay Gelir Vergisi (personal income tax) instead.\n\n**Rate history and current rate**\nThe corporate tax rate has fluctuated in recent years. It stood at 20% through 2020, was temporarily raised to 25% for 2021-2022, reduced back to 23% for 2023, then set at 25% from 2024 onwards. This instability requires businesses to confirm the rate applicable to each tax year in formal calculations.\n\n**Reduced rates**\nSeveral reduced rate mechanisms exist. Companies that complete an initial public offering (IPO) and list on Borsa Istanbul benefit from a 2-percentage-point reduction for 5 years. Export-oriented manufacturers and companies holding Regional Investment Incentive Certificates, Large-Scale Investment Incentive Certificates, or Strategic Investment Incentive Certificates from the Ministry of Industry and Technology can benefit from rates as low as 0% or significantly reduced rates depending on the region and investment type. Technology development zone companies conducting R&D also qualify for a full corporate tax exemption on software and R&D income.\n\n**Taxable income calculation**\nTaxable profit is determined by starting with commercial accounting profit (prepared under Turkish Accounting Standards, TMS/TFRS) and making tax adjustments. Key non-deductible items include: charitable donations above 5% of pre-donation profit, entertainment expenses above 0.5% of net sales, penalties and fines, and interest on disguised thin capitalisation (thin cap rules apply where related-party debt exceeds equity 3:1). Key deductions include: R&D expenditure (100% deduction plus an additional 50% for qualifying R&D spending), investment deductions under incentive certificates, and depreciation under Turkish Accounting Standard 16.\n\n**Advance payments — Gecici Vergi**\nCorporate taxpayers pay quarterly advance payments (Gecici Vergi) at the KV rate applied to quarterly commercial profits. These quarterly payments are credited against the final annual KV liability. If total quarterly payments exceed the final liability, the excess is refunded or credited against other tax debts.\n\n**Filing**\nThe annual Kurumlar Vergisi declaration is filed electronically via the Gelir Idaresi Baskanligi (GIB) e-Beyanname system by the end of April following the tax year (end of April 2026 for the 2025 tax year). Payment is due at the same time as filing. The tax year is the calendar year for most companies; companies with non-calendar accounting years must obtain Revenue Administration approval.\n\n**Withholding at source**\nCertain payments made by resident companies (dividends, royalties, service fees to non-residents) are subject to Stopaj Vergisi (withholding tax) under a separate mechanism. Dividends paid to Turkish individual shareholders are subject to 15% withholding, and to non-resident shareholders at treaty rates (typically 10-15%).