Türkiye’s Tax System: An Overview for Foreign Companies in 2025

Entrepreneurs from around the world considering business opportunities in Türkiye should familiarize themselves with the country’s tax regulations. Türkiye’s taxation system for foreign companies varies depending on the company’s presence and type of activities within the country. Below is a detailed guide to the key tax regulations for 2025 that foreign companies need to know.

1. Full and Limited Tax Liability

Understanding tax liability is essential for foreign companies planning to operate in Türkiye. The system is divided into two categories:

• Full Tax Liability: Companies with a legal or business headquarters in Türkiye are subject to taxation on their global income. This means they must pay taxes on earnings generated both within Türkiye and abroad. Such companies are regulated under full tax liability provisions.
• Limited Tax Liability: Companies without a legal or business headquarters in Türkiye, but that generate income in the country through a permanent establishment or representative, are taxed only on the income earned within Türkiye. These companies fall under limited tax liability provisions.

For more details about full and limited tax liability, you can visit the Vergi Portalı.

2. Taxation Procedures

Both full and limited liability companies must comply with Türkiye’s taxation procedures. Key points to note include:

• Limited Taxpayer Companies: Just like fully liable companies, these companies must file annual income tax returns. The taxation period aligns with the fiscal year. Additionally, Value Added Tax (VAT) returns must be submitted on a monthly basis to the tax office where their business establishment or representative is located.

Learn more about how to file tax returns by exploring the Revenue Administration website.

3. Establishing a Foreign Company in Türkiye

Foreign entrepreneurs are allowed to establish companies in Türkiye. This process is governed by the Turkish Commercial Code and other related legislations. There are two common options for company formation:

• Legal Framework: Foreign businesses can set up subsidiaries or branches in Türkiye. These entities are subject to the same regulations as local companies.
• Required Documents: Essential documents include a tax number application form, copies of identification documents, and proof of address. Additional paperwork may be requested based on the company type and its capital structure.

For further guidance on company registration, consult the Trade Registry Gazette.

4. Tax Applications for 2025

Türkiye has established certain tax provisions for 2025 to support the business environment, including:

• Revaluation Rate: The revaluation rate for 2025 has been set at 43.93%. This rate is used to redefine thresholds in tax laws, including penalties and other tax amounts.

For the latest updates on revaluation rates, visit the official Revenue Administration website.

5. Incentives for Foreign Investors

Türkiye offers several advantages to foreign investors to encourage economic growth and attract global businesses:

• Equal Treatment: Under the Foreign Direct Investment Law, foreign-invested companies established in Türkiye are treated equally with Turkish companies.
• Work Permits: Partners of foreign companies must obtain work permits for their operations. Companies must also meet certain conditions, such as employing at least five Turkish citizens.

Gain more insights into investor incentives by visiting the Investment Office of the Presidency of Türkiye.

Conclusion

The information provided highlights the fundamental tax regulations for foreign companies operating in Türkiye in 2025. Entrepreneurs looking to expand their business into the Turkish market should carefully consider these guidelines. By understanding these tax policies and procedural requirements, international investors can take informed steps toward ensuring compliance and success in Türkiye.

If you’re serious about entering the Turkish market, partnering with legal and financial experts in the country is highly recommended.