Turkey published Law No. 7394 in the Official Gazette on 15 April 2022. Among other things, the Law provides for an increase in the corporate tax rate to 25% on financial sector companies, including banks, financial leasing companies, asset management firms, and insurance companies. Turkey's standard corporate tax rate is 20% but was temporarily increased to 25% in 2021 and 23% in 2022. As provided by Law No. 7394, the 25% tax rate for financial sector companies applies for the 2022 tax period and applies for tax returns that must be submitted as of 1 July 2022.

Other important measures of Law No. 7394 include the introduction of certain VAT exemptions, including:

• a VAT exemption for goods and service deliveries in relation to construction works within the scope of investment incentive certificates for manufacturing and tourism sectors until 31 December 2025; and
• a VAT exemption for engineering services provided to manufacturers of electric motor vehicles in Turkey that they developed exclusively as a result of their R&D activities in Turkey within the scope of investment incentive certificates until 31 December 2023.

These VAT exemptions are generally effective from 15 April 2022. For more information, click the following link for a release from Turkey's Revenue Administration on Law No. 7394.