Turkey Tax Changes — Live Tracker

What changed

The standard KDV rate increased from 18% to 20% (applicable to most goods and services, professional services, software, construction, manufactured goods). The reduced rate increased from 8% to 10% (applicable to many food items, private health services, educational services, hotel accommodation, books). The 1% rate for basic foodstuffs (fresh vegetables, bread, unprocessed agricultural products) was retained unchanged. The rate increases required immediate reconfiguration of invoicing systems, accounting software, and KDV declarations. All invoices issued on or after 10 July 2023 must use the new rates. Transitional rules applied to contracts signed before the rate increase date.

Who it affects

• All KDV-registered businesses in Turkey — prices on invoices must reflect the new rates
• Consumers purchasing goods and services subject to the standard 20% rate
• Businesses in the hospitality, health, and education sectors affected by the 10% rate change
• Exporters and importers (import KDV is also calculated at new rates, though fully recoverable for registered businesses)
• Foreign companies registered for Turkish KDV providing digital services to Turkish consumers

What to do

Verify that all invoicing systems, accounting software, and online stores are using 20% and 10% (not 18% and 8%) for all transactions from 10 July 2023 onwards. Review long-term contracts for KDV adjustment clauses — many contracts had fixed prices including KDV and needed renegotiation. Confirm your e-Fatura system has been updated with the new rates. Review any outstanding KDV refund claims to ensure they use the correct rates.

What changed

New Limited Sirketi formations after 13 January 2024 require TRY 50,000 minimum capital (5× the old threshold). New Anonim Sirketi formations require TRY 250,000 minimum capital (5× the old threshold). Existing companies formed before 13 January 2024 with the old minimums (Ltd TRY 10,000, A.S. TRY 50,000) had until 31 December 2024 to pass a shareholders' resolution increasing capital to the new minimum, deposit the additional capital, and register the capital increase with the Trade Registry. Companies failing to complete the capital increase by the deadline were subject to de-registration (Ticaret Sicilinden Silinme) proceedings by the local Trade Registry office.

Who it affects

• All existing Limited Sirketi companies formed with TRY 10,000 share capital — required to increase to TRY 50,000 by end of 2024
• All existing Anonim Sirketi companies formed with TRY 50,000 share capital — required to increase to TRY 250,000 by end of 2024
• New company formations from January 2024 — must immediately meet the higher capital thresholds
• Foreign investors establishing Turkish subsidiaries — higher minimum capital deposit requirement upfront

What to do

If your company was formed before January 2024: verify the current registered share capital in your Trade Registry records. If below the new minimum (TRY 50,000 for Ltd, TRY 250,000 for A.S.), and you have not already done so, pass a capital increase resolution at a shareholders' meeting, deposit the additional capital in the company bank account, obtain a bank confirmation letter, and file the capital increase notification with the Trade Registry immediately. If the December 2024 deadline has passed without action, consult your SMMM or legal adviser urgently — de-registration proceedings may have commenced.

What changed

Under Kurumlar Vergisi Kanunu Article 11/1-j, where a company's total financing costs (faiz, kur farkı, kira farkı from financial leasing) for the year exceed 10% of its pre-financing, pre-tax commercial profit, then 10% of those total financing costs are non-deductible (Kanunen Kabul Edilmeyen Gider — KKEG). The remaining 90% remains fully deductible. This applies regardless of whether the loan is from related or unrelated parties (thin-cap rules cover related-party loans separately under Article 12). In Turkey's current environment with bank lending rates at 30-50% and many businesses carrying significant debt, the FGK calculation frequently produces material non-deductible amounts that directly increase taxable profit and Kurumlar Vergisi liability.

Who it affects

• All Turkish companies with significant bank loans, financial leases, or intercompany financing
• Businesses in capital-intensive sectors: manufacturing, real estate, energy, construction
• Companies with foreign currency loans experiencing large exchange losses (kur farkı zararı) — these are included in the FGK base
• Holding companies with substantial intercompany borrowing
• Companies using sale-and-leaseback financing arrangements

What to do

Calculate the FGK impact quarterly alongside your Gecici Vergi calculation. Total all financing costs for the year-to-date (bank interest + leasing finance charges + net FX losses on borrowings). If these exceed 10% of pre-financing profit, compute the 10% disallowance and add it to your KKEG. Model the annual impact early — if the FGK disallowance is expected to be material, consider early loan repayments before year-end to reduce the base, or restructure high-interest borrowings into lower-rate facilities. Document the FGK calculation clearly in your accounting work papers for SMMM review.

What changed

The GIB's e-Transformation programme has expanded in three dimensions from 2024-2025. First, the revenue threshold for mandatory e-Fatura is confirmed at TRY 3,000,000 gross annual revenue (including KDV) — businesses crossing this threshold in 2024 must be e-Fatura compliant by 1 July 2025. Second, e-commerce operators are mandatory for e-Fatura regardless of turnover from 2025 — any business selling goods or services online (including marketplace sellers above a de minimis threshold) must use e-Fatura. Third, e-Arsiv Fatura for consumer transactions: all invoices above TRY 30,000 to consumers must be e-Arsiv format — the paper invoice option for large B2C transactions has been eliminated. E-Defter (electronic general ledger and journal) is mandatory for all e-Fatura users and must be created and time-stamped monthly via the GIB e-Defter portal, with annual consolidated books submitted to GIB with XAdES electronic signature.

Who it affects

• All businesses with gross annual revenue above TRY 3,000,000 not yet on e-Fatura
• E-commerce operators and marketplace sellers — mandatory regardless of turnover from 2025
• Medical device and pharmaceutical distributors — mandatory from specific sector regulations
• All existing e-Fatura users — must comply with e-Defter monthly submission requirements
• Businesses issuing large B2C invoices above TRY 30,000 — must use e-Arsiv format

What to do

Check whether your 2024 annual gross revenue exceeded TRY 3,000,000 — if so, you must be live on e-Fatura by 1 July 2025. Engage a GIB-licenced e-dönüsüm service provider now if you are approaching the threshold. If you are an e-commerce operator, assess your 2025 status independently of the revenue threshold — the sector-specific rule may already apply. If you are already on e-Fatura: confirm your e-Defter monthly submissions are current and properly time-stamped. Verify that all invoices above TRY 30,000 issued to consumers are using e-Arsiv format, not paper.

What changed

Under the Presidential Decree No. 2151 and associated GIB communiques, Turkey's BEPS Action 13 implementation requires: (1) Ultimate parent entities (nihai ana isletme) of MNE groups with EUR 750 million+ consolidated revenue resident in Turkey must file a Country-by-Country Report (Ülke Bazlı Rapor) with GIB within 12 months of the fiscal year end; (2) Turkish constituent entities of foreign MNE groups must notify GIB annually of which entity files the CbCR and in which country; (3) If the ultimate parent jurisdiction does not have an exchange agreement with Turkey, the Turkish constituent entity may need to file a secondary (vekil) CbCR in Turkey; (4) The Local File (Yerel Rapor) and Master File (Ana Rapor) are mandatory for Turkish entities with related-party transactions above TRY 30,000 per related party, conforming to OECD BEPS Action 13 documentation standards.

Who it affects

• Turkish parent companies of multinational groups with EUR 750 million+ consolidated annual revenue
• Turkish subsidiaries of foreign multinationals above the EUR 750 million threshold — notification obligation
• Turkish companies with related-party transactions above TRY 30,000 — Local File documentation requirement
• Finance and tax teams of large Turkish and multinational companies operating in Turkey

What to do

Determine whether your group crosses the EUR 750 million consolidated revenue threshold. If yes, confirm which entity is filing the CbCR and in which country, and ensure Turkish entities submit the annual notification to GIB (by the 12-month mark after year end). If your group's ultimate parent is in a jurisdiction without an automatic exchange agreement with Turkey (confirm the current list on GIB website), prepare for a surrogate CbCR filing in Turkey. For all companies with related-party transactions: ensure the Local File (Yerel Rapor) is prepared and on file before the annual KV return deadline — GIB can request it at any point during the 5-year audit window.