Global tax regulations, especially the BEPS 2.0 reforms developed under the OECD/G20 Inclusive Framework, are reshaping the tax approaches of many countries, including the tax environment in Turkey. While Pillar One has not yet been fully implemented in Turkey, Pillar Two – the global minimum tax – entered into force on January 1, 2024. Since Turkey adopted this model, the tax environment in Turkey has started to significantly affect multinational enterprises. Turkey’s decision not to implement Amount B under Pillar One indicates that it will continue using traditional, market-based methods for transfer pricing.
International Tax Regulations in Turkey
1. Global Minimum Tax Implementation (Pillar Two)
- On June 20, 2024, Turkey prepared a legislative draft introducing a minimum tax obligation for multinational groups with annual consolidated revenues exceeding €750 million. This regulation was implemented as of January 1, 2024, and will require a dedicated tax return starting in 2025.
- In addition, a domestic minimum corporate tax system was introduced for both individuals and legal entities, requiring at least a 10% corporate income tax regardless of deductions or exemptions. This marks a significant evolution in the tax environment in Turkey.
2. Revisions to Tax Procedure and Income Tax Laws
- With Law No. 7524 enacted on August 2, 2024, penalties to combat the shadow economy were increased; the special irregularity fine was tripled, and the 25% early payment discount was removed.
- As of January 1, 2025, a daily income tracking system began: If declared income differs from estimated income by more than 20%, taxpayers may face audits and potential penalties. This is a notable shift in the tax environment in Turkey regarding enforcement.
3. Tax Regulations for Financial Institutions
- In 2025, Turkish banks requested to apply inflation accounting to adjust their taxable bases. If approved, this could lower their tax burdens, though the government remains cautious.
- In July 2025, the withholding tax on short-term Turkish lira deposits and money market funds was increased by 2.5 percentage points (up to 17.5% for deposits under 6 months, and 15% for up to 1 year).
4. Corporate Tax Reform and Other Fiscal Changes
- According to a reform package reported by the Financial Times, a global minimum tax rate of 15% for multinationals and a 10% minimum for domestic firms was introduced. The standard corporate tax rate remains at 25%, but firms are now required to pay a minimum effective rate of 10% after deductions.
- In 2024, indirect taxes such as VAT and Special Consumption Tax began to update automatically twice a year (January and July), based on domestic PPI inflation.
5. Sustainability and Environmental Taxes
- As of 2025, publicly listed companies in Turkey are required to prepare sustainability reports under TSRS (Turkish Sustainability Reporting Standards), subject to independent audit. Select tax incentives are provided to encourage compliance.
- In 2026, the Emissions Trading System (ETS) is expected to launch in pilot sectors, aligned with the EU’s CBAM (Carbon Border Adjustment Mechanism). Exporters from Turkey will fall under this scheme, impacting the tax environment in Turkey from a climate policy perspective.
🧠Evaluating the Tax Environment in Turkey
Turkey is transitioning toward a system that aligns closely with international standards, while maintaining certain national tax policies. The evolving tax environment in Turkey now includes:
- A global minimum tax for multinational enterprises (Pillar Two),
- A local minimum tax rate of 10% for domestic entities,
- Continued use of traditional transfer pricing methodologies (Amount B not adopted),
- Increased financial transparency through revised accounting and reporting standards.
These developments aim to enhance international tax compliance while making the tax environment in Turkey more stable, transparent, and investor-friendly.
At ÖzbekCPA, we provide expert support to multinational and local companies in:
- Global minimum tax calculations
- Transfer pricing advisory
- Tax return preparation and compliance processes
- Adaptation plans for new tax regulations
Contact us to ensure full compliance with the new tax regulations, minimize risks, and maximize opportunities.
