Operating a company in Turkey comes with various tax obligations. In this article, we explain the 5 fundamental taxes that every company must know, in simple language and with practical examples. Let's put aside complex formulas and try to understand the subject with examples from daily life.
1. Corporate Tax: The Share Taken from Your Company's Profit
Corporate tax is the tax you pay on the profit your company makes at the end of the year. The rate in 2026 is 25%.
How is it Calculated?
Simply put:
- You calculate your commercial profit at the end of the year
- You add back some expenses (those not accepted for tax purposes)
- You subtract some earnings (those that are exempt)
- You pay 25% of the remaining amount as tax
Practical Example:
Your company made 400,000 TL profit at the end of the year. However, there is 50,000 TL of legally non-accepted expenses in it (for example, undocumented expenses). In addition, your 100,000 TL real estate sale gain is within the exemption scope.
• Balance Sheet Profit: 400,000 TL
• Non-accepted expenses added back: +50,000 TL
• Exempt earnings subtracted: -100,000 TL
• Tax base: 350,000 TL
• Tax to be paid: 350,000 × 25% = 87,500 TL
Minimum Corporate Tax: Paying Tax Even When You Make a Loss
Even if your company makes a loss, you need to pay a minimum tax based on the total of certain expenses. This is a regulation introduced especially to prevent off-the-record activities.
Which Expenses Are Included?
- Employee salaries and premiums
- Rent payments
- Depreciation
- Services received from outside
50% of the total of these expenses is accepted as the minimum tax base, and 25% of this is paid as tax.
Practical Example:
Your company made a loss, but:
• Employee expenses: 500,000 TL
• Rent: 100,000 TL
• Depreciation: 200,000 TL
• Total: 800,000 TL
• Minimum tax base: 800,000 × 50% = 400,000 TL
• Minimum corporate tax: 400,000 × 25% = 100,000 TL
Even if there is a loss with normal calculation, you must pay at least this much tax.
📅 When is it Declared?
If your company's accounting period ends in December, you declare and pay it by the end of April.
2. VAT (Value Added Tax): Tax Calculated on Every Transaction
VAT is a tax you add to the price of goods or services you sell, and pay on the price of goods and services you buy. You pay the difference to the state.
VAT No. 1: Classic VAT Declaration
How Does It Work?
The difference between the VAT you collect from your sales and the VAT you pay for your purchases is the VAT you will pay.
Practical Example:
• This month you made 100,000 TL + VAT in sales
• VAT collected from your sales: 100,000 × 20% = 20,000 TL
• VAT paid on your raw material and material purchases: 12,000 TL
• VAT to be paid: 20,000 - 12,000 = 8,000 TL
If the VAT you paid was higher, the difference would carry forward to the next month.
VAT Rates (2026):
- General: 20%
- Basic food, books: 1% or 10%
- Some services: Exempt from VAT
VAT No. 2: VAT You Withhold on Behalf of Others
In some cases, you withhold the seller's VAT and pay it to the state. This is called "VAT withholding".
In Which Cases is it Applied?
- Scrap purchases (90% withholding)
- Metal, plastic, machinery trade (50%)
- Cleaning, maintenance-repair services (50%)
- Construction work (50-70%)
- Consulting services (50%)
Practical Example:
You received 10,000 TL + VAT service from a cleaning company.
• Invoice amount: 10,000 TL
• VAT (20%): 2,000 TL
• Total invoice: 12,000 TL
• But there is 50% withholding, meaning you withhold half of the VAT: 1,000 TL
• What you will pay to the cleaning company: 12,000 - 1,000 = 11,000 TL
• You declare and pay the 1,000 TL you withheld with VAT No. 2
📅 When is it Declared? Every month by the 26th.
3. Income Tax Withholding: Tax of Your Employees and Collaborators
Your company is obliged to withhold tax from the payments it makes. There are two main categories:
A) Salary Withholding
You withhold SSI premium and income tax from your employees' gross salary.
How is it Calculated?
- SSI premium (~15%) is deducted from gross salary
- Tax is calculated on the remaining amount according to income tax brackets
- Minimum Living Allowance (MGA) is deducted if applicable
- The remaining amount is the net salary that reaches the employee's hand
Income Tax Brackets:
There is a progressive tax bracket starting at 15% in the first bracket and going up to 40% in the last bracket.
Practical Example:
An employee with 15,000 TL gross salary:
• Gross: 15,000 TL
• SSI premium (-): ~2,250 TL
• Income tax base: ~12,750 TL
• Calculated income tax: ~2,100 TL
• Net salary: ~10,650 TL
Minimum Wage Tax Exemption (After 2022)
As of 2022, Minimum Living Allowance (MGA) has been abolished. A simpler system has replaced it: Earnings up to the minimum wage amount are completely exempt from income tax and stamp tax. This exemption is the same for everyone, regardless of marital status or number of children.
B) Other Withholdings
You withhold not only from salary, but also from other payments your company makes:
- Professional Service Payments (Lawyer, Accountant, Consultant): 20% withholding
- Rent Payments: 20% withholding
- Royalty and Patent Income: 17-20% withholding
- Dividend Distribution: 10% withholding
Example: Professional Service Payment
You received 10,000 TL + VAT legal service.
• Invoice total: 12,000 TL
• 20% withholding: 2,000 TL
• What you will pay to the lawyer: 10,000 TL (after withholding withholding and VAT)
📅 When is it Declared? All withholdings are declared and paid by the 26th of each month with the Withholding Declaration.
4. Stamp Tax: Tax Collected on Documents
Stamp tax is a tax you pay on the contracts and documents you issue.
Which Documents are Subject to Stamp Tax?
- Employment contracts (except minimum wage amount)
- Rental contracts
- Service purchase contracts
- Undertakings
- Surety contracts
- Negotiable instruments such as checks, promissory notes
Important Exemptions:
- Balance sheet, trial balance and tax declarations are exempt from stamp tax
- The portion up to minimum wage in employment contracts is exempt
- Documents related to employee receivables are exempt
- Correspondence between public institutions is exempt
How is it Calculated?
Proportional Stamp Tax:
You pay tax equal to 0.948% of the contract amount.
Practical Example - Rental Contract:
You made a contract for 120,000 TL annual rent:
• Stamp tax: 120,000 × 0.00948 = 1,137.60 TL
• Generally, the tenant and landlord pay half and half: 568.80 TL
Practical Example - Service Contract:
500,000 TL consulting contract:
• Stamp tax: 500,000 × 0.00948 = 4,740 TL
Fixed Stamp Tax:
A fixed amount is paid for some transactions (updated annually):
- Commercial book certification
- Trade registry procedures
- Some special declarations
📅 When is it Paid? It can be paid when the contract is issued or with monthly collective declaration.
5. Provisional Tax: Corporate Tax Advance Paid During the Year
Provisional tax is the tax advance you pay every 3 months without waiting for the end of the year. It is offset against corporate tax at the end of the year.
How is it Calculated?
Every 3 months, you calculate 25% of the profit you have earned up to that point.
Practical Example:
Period 1 (January-March):
• Profit: 100,000 TL
• Provisional tax: 25,000 TL
• You pay in April
Period 2 (January-June total):
• Profit: 250,000 TL
• Total provisional tax: 62,500 TL
• Previously paid: 25,000 TL
• To pay this period: 37,500 TL
• You pay in July
Periods and Dates
| Period | Months | Declaration Date |
|---|---|---|
| 1. Period | January-March | April 17 |
| 2. Period | April-June | July 17 |
| 3. Period | July-September | October 17 |
| 4. Period | October-December | February 17 |
What Happens at Year End?
When you file your corporate tax declaration at the end of the year:
• Calculated corporate tax: 500,000 TL
• Provisional taxes you paid during the year: 450,000 TL
• To be paid: 50,000 TL
If provisional tax is overpaid, you can get a refund or offset it against your other taxes.
Tax Calendar: When Do You Pay What?
By the 26th of Each Month:
- ✓ Withholding Declaration (salary and other withholdings)
- ✓ VAT Declaration (No. 1)
- ✓ VAT Declaration (No. 2 - withholding)
Every 3 Months:
- ✓ Provisional Tax (by the 17th - April, July, October, February)
- ✓ VAT Declaration (by the 26th for those declaring quarterly)
Once a Year:
- ✓ Corporate Tax Declaration (by the end of the 4th month after the accounting period)
Practical Tips
1. Organize Your Document System
Regularly archive all invoices, receipts and contracts. Create folders in digital environment: "Incoming Invoices", "Outgoing Invoices", "Contracts", "Payroll" etc. Keeping regular records every month saves lives at the end of the year.
2. Create a Tax Calendar
Set reminders on your phone or computer:
- 26th of each month: VAT and Withholding
- 17th every 3 months: Provisional Tax
- 4th month after year end: Corporate Tax
Penalties and interest can be really high. Even a one-day delay can result in a fine.
3. Switch to E-Invoice and E-Ledger System
Get used to these systems that are now mandatory. Reduces paperwork, lowers error risk and facilitates compliance with the tax office. Although it may seem difficult at first, it becomes very practical once you get used to it.
4. Always Work with a Tax Advisor
The tax system is complex and constantly changing. A professional tax advisor:
- Does tax planning
- Informs you about legal incentives
- Prevents declaration errors
- Is with you during tax inspections
The fee you will pay is very small compared to the benefit it will bring.
5. Don't Neglect Withholding and Deduction Tracking
Especially VAT No. 2 and withholdings you make as a responsible party should not be forgotten. If you forget, you pay the money you withheld out of pocket and also get a fine. It must be on your monthly checklist.
6. Plan Your Cash Flow According to Tax Periods
Especially during provisional tax and corporate tax periods, keep sufficient cash in your treasury. Make payments before the last day, don't stress.
7. Benefit from Exemptions and Incentives
Don't miss opportunities such as R&D incentives, regional supports, investment deductions. Talk with your tax advisor about which incentives you can benefit from.
8. Keep Your Records for at Least 5 Years
The tax office can conduct retrospective inspections. Keep all your documents for the legal retention period. Don't forget to make digital backups as well.
Final Words
Even though the tax system seems complex, once you grasp its basic logic, you can manage your business much more healthily. Each tax type actually concerns a different aspect of your business:
- Corporate Tax: Indicator of your profitability
- VAT: Tracking of your commercial cycle
- Withholdings: Human resources and external service management
- Stamp Tax: Contract and document organization
- Provisional Tax: In-year performance tracking
If you see these taxes not as a burden but as a health indicator of your business, you will both fulfill your legal obligations and have taken the pulse of your business.
We wish you a successful and problem-free tax management! 🎯
Note: The information in this article is current as of the beginning of 2026. Tax legislation can change frequently, so please check current legislation or consult your tax advisor before making important decisions.
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The information in this article is for general informational purposes only. For your specific situation, please contact us or another expert.