Türkiye is an attractive market for entrepreneurs due to its tax incentives and investment-friendly policies. As of 2025, significant changes and updates have been made to the tax system. This article provides the latest information on tax rates, exemptions, and incentives for international investors in Türkiye.
Income Tax Brackets (2025)
Income tax rates in Türkiye are updated annually based on the revaluation rate. The applicable tax brackets for 2025 are as follows:
- Up to 158,000 TL: 15% tax rate
- Up to 330,000 TL: 23,700 TL for the first 158,000 TL, plus 20% on the excess
- Up to 1,200,000 TL: 58,100 TL for the first 330,000 TL, plus 27% on the excess
- Up to 4,300,000 TL: 293,000 TL for the first 1,200,000 TL, plus 35% on the excess
- Above 4,300,000 TL: 1,378,000 TL for the first 4,300,000 TL, plus 40% on the excess
Tax Incentives and Exemptions
To support entrepreneurs and attract investments, Türkiye provides various tax incentives:
- New businesses benefit from income tax exemptions or lower income tax rates.
- Technology sector companies receive special tax incentives.
- Free zone companies enjoy exemptions from corporate tax, VAT, and customs duties.
- Micro-enterprises benefit from tax reductions and social security premium support.
Revaluation Rate (2025)
The revaluation rate for 2025 has been set at 43.93%. This rate is used for:
- Updating tax brackets,
- Determining tax penalties,
- Increasing fees and other taxes.
Other Tax Applications
- Motor Vehicle Tax: Increased according to the revaluation rate.
- Stamp Duty: Fixed stamp duty amounts are raised in line with the revaluation rate.
- Environmental Cleaning Tax: Increased by half of the revaluation rate.
- Traffic Fines: Updated according to the revaluation rate.
Double Taxation Agreements
Türkiye has signed double taxation avoidance agreements, offering significant advantages to investors. These agreements:
- Prevent income from being taxed in two countries simultaneously,
- Reduce the tax burden on international investors,
- Promote a more attractive investment climate with lower tax rates.
Regional and Sector-Specific Incentives
Türkiye provides tailored tax benefits for different sectors and regions:
- Free Zones: Companies benefit from exemptions on corporate tax, VAT, and customs duties.
- Strategic Sectors: Industries such as technology, energy, agriculture, healthcare, and manufacturing receive special incentives.
- Regional Incentives: Companies investing in specific regions of Türkiye are offered special tax advantages.
Türkiye’s tax system provides various benefits and incentives for entrepreneurs. Investors can take advantage of sector-specific tax reductions and government support, creating a more competitive business environment. These tax advantages present great opportunities for those planning to establish a business in Türkiye.