International Tax Planning and Investor Guidance: 2024–2025 Overview

Global Minimum Taxation and the G7 Agreement

The OECD’s Pillar Two framework came into force in 2024, introducing a global minimum tax that has been adopted by G7 nations and many OECD and EU member states, including Türkiye. This system operates on two main principles: the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR). When a parent company’s jurisdiction does not implement IIR, the UTPR allows other jurisdictions to claim the difference in unpaid tax.

Türkiye’s Standing in International Tax Competitiveness

According to the 2025 International Tax Competitiveness Index, Türkiye ranks 12th globally. This ranking evaluates tax systems based on corporate income tax, personal income tax, consumption taxes, property taxes, and the treatment of foreign-earned income.

Key characteristics of Türkiye’s tax framework include:

• dividend income is taxed at a rate of 20%, below the OECD average of 24.7%
• capital gains derived from shares traded on the local stock exchange are exempt if held for more than two years
• an allowance for corporate equity is provided to offset the debt bias within the standard corporate tax system
• Türkiye has a robust network of double tax treaties with 93 countries
• the digital services tax rate will be 5% as of January 1, 2026, and reduced to 2.5% from January 1, 2027

Trends in Global Tax Systems and Reform Efforts

Several economies have undertaken significant reforms to improve competitiveness and attract investment:

• Germany has reintroduced accelerated depreciation for machinery and equipment and plans to cut corporate tax rates by five percentage points within five years, improving its ranking from 21st to 20th
• Portugal has reduced its long-term capital gains tax rate from 28% to 19.6% and its top corporate tax rate from 31.5% to 30.5%
• The United States reinstated full expensing for plant and equipment and extended this measure to certain industrial buildings, climbing from 16th to 15th
• Canada removed its digital services tax and withdrew a planned increase in the inclusion rate for capital gains, improving its rank from 14th to 13th

Investment Incentives and Tax Benefits in Türkiye

Türkiye provides a wide range of incentives for international investors through its Investment Office of the Presidency of the Republic of Türkiye. The 2025 Investment Program includes extensive financial allocations and sectoral priorities designed to strengthen infrastructure and education.

Key data from the 2025 Investment Program include:

• a total of 14,238 projects are under implementation, including 3,783 flagship initiatives
• the total investment allocation amounts to 1.444 trillion Turkish Lira
• the education sector’s funding increased by 44.5% to 217.9 billion Turkish Lira

Recent Developments in International Tax Planning

Despite regulatory tightening, research shows that aggressive cross-border tax planning remains prevalent, particularly through intra-group financing and transfers of intangible assets. According to the latest OECD Mutual Agreement Procedure statistics, the average resolution time is 27.4 months for MAP cases and 30.9 months for transfer pricing disputes.

Key Recommendations for International Investors

When planning taxes and cross-border structures, entrepreneurs should take into account the following considerations:

• global minimum tax compliance: assess how IIR and UTPR rules influence your group’s profitability
• jurisdiction selection: prioritize countries with high tax competitiveness and stable regulatory systems
• transfer pricing: ensure full documentation and compliance with OECD transfer pricing guidelines
• double tax treaties: leverage bilateral agreements to avoid double taxation and mitigate withholding tax exposure

Given the continuous evolution of tax regimes worldwide, investors must carefully analyze the latest fiscal legislation and international commitments before making decisions. Close consultation with local tax and legal advisors in Türkiye is essential to ensure full compliance and optimal tax efficiency.