Taxation and Accounting for Entrepreneurs in Türkiye: Key Updates for 2024-2025
Türkiye continues to offer attractive incentives and important regulatory updates that entrepreneurs should consider when planning business activities for 2024 and 2025. This article outlines the essential information, including tax exemptions, government support programs, and special regulations that particularly affect international entrepreneurs.
1. Young Entrepreneur Support and Tax Exemption
Income Tax Exemption
- Entrepreneurs under the age of 29 benefit from a full income tax exemption on annual gross earnings up to 330,000 TL during their first three tax years.
- If the annual gross earnings exceed the exemption threshold, the standard income tax rates of 15% and 20% are applied.
- The exemption applies to gross revenue, meaning the amount before deducting business expenses.
Bağ-Kur Premium Support
- Eligible young entrepreneurs are also exempt from Bağ-Kur (social security) premium payments for a period of one year.
- This support covers monthly premiums of 7,671.38 TL, totaling an annual subsidy of 92,056.56 TL, funded directly by the government.
2. KOSGEB Support Program for Entrepreneurs
- KOSGEB offers an additional 10,000 TL in startup grants for entrepreneurs who are young, female, disabled, or relatives of martyrs.
- The program prioritizes entrepreneurs with innovative projects and includes assistance in business plan development, training, and coaching services.
More details on eligibility and application procedures can be found on the official KOSGEB website.
3. Controlled Foreign Company (CFC) Regulations for International Entrepreneurs
Türkiye’s Controlled Foreign Company (CFC) rules, known locally as Kontrol Edilen Yabancı Kurum (KEYK) regulations, are particularly significant for international business owners:
- If a Turkish resident company holds 50% or more of a foreign company’s shares, the foreign company’s income is taxable in Türkiye—even if the income is not distributed.
- KEYK rules apply if the following conditions are met:
- the foreign company earns more than 25% of its income from passive sources such as interest or rent
- the foreign entity is subject to less than 10% corporate taxation in its country of incorporation
- the foreign company’s annual gross income exceeds the equivalent of 100,000 TL in foreign currency
Entrepreneurs engaged in cross-border activities should carefully consider these rules to avoid unexpected tax liabilities. Further guidance can be found through specialized international tax advisory services.
4. Other Tax Obligations in Türkiye
While the income tax exemption offers significant relief, it is important to note that several other taxes still apply, including:
- Value-Added Tax (VAT)
- Stamp Duty
- Withholding Taxes
- Corporate Tax for companies, currently set at 25%
Make sure to remain compliant with all applicable tax obligations beyond income tax to ensure smooth business operations.
5. Essential Points for Foreign Entrepreneurs
- Türkiye has signed double taxation agreements with numerous countries, helping foreign entrepreneurs manage their tax obligations efficiently and avoid double taxation.
- Income generated through permanent establishments in Türkiye by foreign entities is subject to local taxation under Turkish law.
Given these opportunities and obligations, entrepreneurs planning to invest or expand into Türkiye should develop informed financial strategies. Special attention should be paid to the CFC rules, shifting tax brackets, and ongoing compliance requirements to maximize benefits and reduce risks.
For more detailed guidance, consulting with a local tax consultant or legal advisor in Türkiye is highly recommended.