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Turkey Reverts to 20% Standard Corporate Tax Rate in 2023 — Orbitax Tax News & Alerts

With effect from 1 January 2023, Turkey has reverted its standard corporate tax rate back to 20%. As provided by Law No. 7316 of 22 April 2021, the standard rate was temporarily increased to 25% for the 2021 tax period and 23% for the 2022 tax period. Other rates apply for certain taxpayers, including a 25% tax rate on financial sector companies, including banks, financial leasing companies, asset management firms, and insurance companies. Further, a 1% reduction (discount) in the corporate tax rate is provided for qualifying export and production companies, resulting in a 19% tax rate on earnings from export or production activities, and a 2% reduction is provided for five years for qualifying companies that list at least 20% of their shares on the Istanbul Stock exchange in an initial public offering, resulting in an 18% tax rate. Where a company qualifies for both rate reductions, the 2% rate reduction is first applied on the entire tax base and the 1% rate reduction is then applied in addition to the 2% rate reduction for earnings from export or production activities.