Three separate minimum taxes in Turkey are regularly confused with one another. The domestic minimum corporate tax applies to every company at 10%. The local and global minimum top-up taxes concern only members of multinational groups with consolidated revenue above EUR 750 million, and the minimum rate there is 15%.
This page covers how scope is determined, how the effective tax rate is calculated, the substance-based income exclusion, the safe harbours, how the rules interact with incentives in Turkey, and the filing calendar.
Three Taxes That Get Confused
| Tax | Rate | Who it applies to | In force from |
|---|---|---|---|
| Domestic minimum corporate tax | 10% | All corporate taxpayers | 2025 income |
| Local minimum top-up tax | 15% | Turkish members of in-scope groups | 2024 fiscal year |
| Global minimum top-up tax | 15% | Turkish parent and intermediate parent entities | 2024 fiscal year |
The domestic minimum corporate tax provides that the tax calculated may not be less than 10% of income before deductions and exemptions, and it applies to every company regardless of size. Membership of a multinational group is not required.
The minimum top-up tax is the Turkish implementation of the international minimum tax rules. It applies only to groups above the threshold and is calculated on a jurisdictional basis by an entirely different method. Neither replaces the other; a company in scope is subject to both.
Scope: the EUR 750 Million Test
- The test looks at annual revenue in the ultimate parent’s consolidated financial statements
- The threshold must be exceeded in at least two of the four fiscal years preceding the reported year
- The threshold is the local currency equivalent of EUR 750 million; conversion rates are published separately
- The test is applied at group level; the size of the Turkish subsidiary is not decisive
- Revenue of excluded entities is still taken into account in the revenue test
- Government entities, international organisations, non-profits and pension funds are excluded entities
- Being an excluded entity does not remove the group from the threshold test
- For companies with a special accounting period, that period is the taxable period
The threshold is measured on the group’s consolidated revenue, not on the Turkish subsidiary. A small foreign-owned Turkish company falls within scope because of the size of its group, and carries filing and notification obligations even where no tax arises.
A significant share of the local top-up tax returns filed for the 2024 reporting year were filed although no tax was payable. Seeing that the obligation follows from scope rather than from tax is the first step in this area.
How the Tax Is Calculated
| Step | What happens |
|---|---|
| 1. Jurisdictional income | Adjusted profits and losses of the entities in the country are combined |
| 2. Adjusted covered taxes | Current tax expense is determined with deferred tax adjustments |
| 3. Effective tax rate | Covered taxes divided by jurisdictional income |
| 4. Top-up percentage | The difference between 15% and the effective rate |
| 5. Tax base | Jurisdictional income less the substance-based income exclusion |
| 6. Tax | The top-up percentage is applied; a qualified local top-up tax is credited |
The calculation is made by jurisdiction rather than by entity. The income and taxes of several group companies in Turkey are combined, and a single effective rate results even where one entity is taxed heavily and another lightly.
The Substance-Based Income Exclusion
An amount reflecting real activity in the country is deducted from the base: a percentage of employees’ annual gross payroll and a percentage of the net book value of tangible assets.
Permanent rates
- Gross payroll
- 5%
- Tangible assets
- 5% of net book value
- Effect
- Narrows the base where there is real activity
Transition period
- Starting point
- Rates begin above the permanent level
- Reduction
- 0.8 points a year on payroll, 0.4 on assets
- Result
- They fall gradually to 5% and 5%
The exclusion shows that the rules are not a plain rate comparison: between two countries with the same effective tax rate, the top-up arising in the one with a plant and employees is lower.
Safe Harbours
Where one of the simplified tests based on a qualified country-by-country report is met, the top-up tax for that country is treated as zero. It is limited to the transition period and cannot be used for fiscal years ending after 30 June 2028.
Where average revenue and average income in the country fall below the defined limits, the top-up tax is treated as zero. The averages are taken over the current year together with the two preceding fiscal years.
Where a country’s local minimum top-up tax meets the international standards, other countries do not charge a second top-up for that country. The taxing right stays with the country where the income arises.
Using the transitional safe harbour requires a filed country-by-country report prepared under accepted accounting standards. Without qualifying data there is no simplification.
Interaction with Incentives in Turkey
The free zone earnings exemption, the technology development zone exemption, reduced-rate corporate tax and the research and development deduction all reduce tax paid in Turkey and can bring the jurisdictional effective rate below 15%. Where that happens, the difference arises as top-up tax.
Because Turkey applies a local minimum top-up tax, that difference is as a rule collected in Turkey rather than abroad. For a group in scope, the real value of an incentive is limited to the part that does not take the effective rate below 15%; the substance-based income exclusion widens that limit to a degree.
- Establish whether the group is in scope before applying for an incentive
- For an in-scope group, model the net benefit of the incentive after top-up tax
- Headcount and tangible asset investment increase the substance-based exclusion
- The domestic minimum corporate tax already sets a separate floor; assess both together
- Deferred tax adjustments can make the effective rate differ from expectations
- Because the calculation is jurisdictional, all the group’s Turkish companies are taken together
- The transitional safe harbour may defer the calculation in the early years but is not permanent
- Model the investment decision before the incentive certificate is obtained
Filing and Deadlines
| Obligation | Deadline | Note |
|---|---|---|
| Local top-up tax return | End of the 12th month after the period | 31 December for a calendar year |
| Global top-up tax return | Last day of the 15th month | Tax is paid in the same period |
| Global top-up information return | Attached to the return | Mandatory |
| Notification form | Within the filing period | For group members that are not taxpayers |
| 2024 period, global top-up | End of the 18th month | Transitional provision; 30 June 2026 |
| 2024 period, local top-up | 28 January 2026 | Extended several times by the administration |
For the 2025 fiscal year, a calendar-year taxpayer files the local top-up return by 31 December 2026 and the global top-up return by 31 March 2027. Returns and the information return are filed through the electronic filing system.
During 2025 the United States set out a position under which the global minimum tax would not apply to multinationals headquartered there. That development prompted debate about how the rules operate, and international negotiations will determine how the position develops.
As far as Turkey is concerned the legislation is in force and the filing obligations are running. Developments in the country where a group is headquartered do not by themselves remove the filing obligation in Turkey.
Common Mistakes
- Confusing it with the domestic minimum corporate tax. One is 10% and applies to everyone; the other is 15% and applies only to groups in scope.
- Treating a small Turkish company as out of scope. The threshold is measured on the group’s consolidated revenue.
- Not filing because no tax arises. The obligation follows from scope, not from tax.
- Calculating entity by entity. The effective rate is jurisdictional, combining all the group’s companies in the country.
- Overlooking the substance-based income exclusion. Payroll and tangible assets narrow the base materially.
- Treating the transitional safe harbour as permanent. It is limited to the 2026 fiscal year.
- Relying on a safe harbour without country-by-country data. Without qualifying data the simplification is unavailable.
- Deciding on an incentive without allowing for the top-up. For a group in scope the net benefit can be materially lower.
Frequently Asked Questions
Who does the global minimum top-up tax apply to in Turkey?
Is it the same as the domestic minimum corporate tax?
What is the difference between the local and global top-up tax?
How is the effective tax rate calculated?
What is the substance-based income exclusion?
Are free zone and technology zone exemptions affected?
Must a return be filed where no tax arises?
What are the filing deadlines?
As the Ozbek CPA team, we support Turkish subsidiaries of multinational groups in this area — applying the scope test, calculating the jurisdictional effective tax rate, determining the substance-based income exclusion, assessing the safe harbour tests, modelling the net benefit of incentives after top-up tax, and running the return and notification process. See also our pages on tax rates in Turkey, the Turkish taxation system, corporate tax incentives and tax advisory. Contact us.
