Buried inside the broader 2026 corporate tax picture is a rule that changes how much certain companies actually pay, regardless of how well their accountant uses available deductions and exemptions: the domestic minimum corporate tax.
What the minimum tax actually does
Turkey's standard corporate tax rate is 25% (30% for financial institutions), but companies can reduce their taxable base through legitimate deductions, exemptions and incentives. The domestic minimum corporate tax sets a floor under that process: for income earned from 2025 onward, most companies cannot bring their effective tax burden below 10% of the relevant base, no matter how favorable their deductions are on paper.
Why it exists
The rule targets situations where a company's headline taxable income looks very low — sometimes near zero — after exemptions and incentives are applied, even though the business is genuinely profitable. The minimum tax closes that gap by guaranteeing a baseline contribution regardless of how the deductions stack up.
Who is exempt
Newly established companies are excluded from the minimum floor for their first three accounting periods. This matters for foreign investors setting up a new entity in Turkey: the exemption gives a genuine start-up window before the floor applies, which is worth factoring into early financial projections.
What this means in practice
- If your company relies heavily on deductions or incentive regimes, model your tax position against both the standard calculation and the 10% floor — the higher of the two is what you'll owe.
- New entities should track their three-period exemption window carefully, since the floor applies automatically once it ends.
- This interacts with the exporter rate reduction and other incentives, so the combined effect is worth reviewing case by case rather than assuming exemptions simply stack.