Minimum Domestic Corporate Tax Turkey
Minimum Domestic Corporate Tax Turkey
Table of contents
- Minimum Domestic Corporate Tax
- What Is the Minimum Domestic Corporate Tax Regulation?
- On Which Amount Will the Minimum Domestic Corporate Tax Turkey Be Calculated?
- How Will the Minimum Domestic Corporate Tax Be Calculated for New Taxpayers?
- Will the minimum domestic corporate tax in Turkey Tax Be Applied in Provisional Tax Periods?
- From Which Accounting Period Will the Domestic Minimum Alternate Tax Start to Be Applied?
- Will Past Years' Losses Be Included in the Calculation?
- Which Exemptions Will Not Be Deducted in the Calculation?
- Which Deductions Will Not Be Deducted in the Calculation?
- An Example
- How Is the minimum domestic corporate tax Calculated for Taxpayers Not Benefiting from Exemptions and Deductions?
- For Taxpayers with No Tax Base
- Contact Us
Minimum Domestic Corporate Tax
Everything You Should Know About Minimum Alternate Tax in Turkey
Dear Readers,
Everything you should know about Minimum Alternate Tax in Turkey is becoming increasingly important as new regulations come into effect. The Minimum Alternate Tax (MAT) application, a recent hot topic, has been implemented with the Communiqué (Serial No: 23) Amending the Corporate Tax General Communiqué (Serial No: 1), published in the Official Gazette dated September 28, 2024, and numbered 32676. Previously, in our article titled "How Will the Minimum Alternate Tax Be Calculated?" penned on July 31, 2024, we examined this regulation in detail. However, due to incoming questions, we've observed some uncertainties, especially among taxpayers who do not benefit from deductions and exemptions and who do not have a tax base at the end of the period. Therefore, we wanted to explain the issue again with examples.
What Is the Minimum Domestic Corporate Tax Regulation?
Everything you should know about Minimum Alternate Tax in Turkey includes understanding that the domestic Minimum Alternate Tax is a regulation stating that the corporate tax calculated by considering the provisions of Articles 32 and 32/A cannot be less than 10% of the corporate income before deductions and exemptions.
On Which Amount Will the Minimum Domestic Corporate Tax Turkey Be Calculated?
To grasp everything you should know about Minimum Alternate Tax in Turkey, it's essential to note that the corporate income on which the 10% corporate tax will be calculated is determined by adding non-deductible expenses to the commercial balance sheet profit or loss and then subtracting the exemptions and deductions stipulated in the article.
How Will the Minimum Domestic Corporate Tax Be Calculated for New Taxpayers?
For those seeking everything you should know about Minimum Alternate Tax in Turkey, it's important to understand that for taxpayers starting business for the first time, this provision will not be applied for three accounting periods starting from the accounting period in which the activity begins. This ensures that new taxpayers beginning their investments following the establishment phase are not affected by this regulation.
Will the minimum domestic corporate tax in Turkey Tax Be Applied in Provisional Tax Periods?
Yes, everything you should know about Minimum Alternate Tax in Turkey includes the fact that the Minimum Alternate Tax will also be applied during provisional tax periods.
From Which Accounting Period Will the Domestic Minimum Alternate Tax Start to Be Applied?
Everything you should know about Minimum Alternate Tax in Turkey indicates that this regulation has come into effect to be applied to the incomes obtained in the taxation periods of 2025 and the following years. For institutions subject to special accounting periods, it applies to incomes obtained in the special accounting period starting in the 2025 calendar year and subsequent taxation periods.
Will Past Years' Losses Be Included in the Calculation?
In calculating the Minimum Alternate Tax, everything you should know about Minimum Alternate Tax in Turkey is that past years' losses will not be deducted from the tax base; the calculation will be made without considering them.
Which Exemptions Will Not Be Deducted in the Calculation?
Understanding everything you should know about Minimum Alternate Tax in Turkey involves knowing which exemptions will not be deducted in the calculation:
Foreign income
Sale income of foreign subsidiary shares
Income exemption of investment funds and partnerships
Exemption of real estate subsidiary shares and fund sale income
Sale income of real estate and subsidiary shares of those indebted to banks, financial leasing or financing companies, or the Savings Deposit Insurance Fund (TMSF)
Foreign branch income
Income from foreign construction, repair, assembly, and technical services
Education and training income
Income related to management companies in the taxation of foreign fund incomes
Sale income of industrial property rights
Income obtained from exchange-protected deposit accounts
Income from the disposal of product certificates issued within the scope of licensed agricultural warehouses
Income obtained from R&D and innovation activities
Which Deductions Will Not Be Deducted in the Calculation?
Everything you should know about Minimum Alternate Tax in Turkey also includes the deductions that will not be deducted in the calculation:
Sponsorship expenses
Donations and aids
Donations related to the construction of education and health facilities and dormitories
Donations for cultural and tourism purposes
Donations made to aid campaigns initiated by the President
Cash donations made to Kızılay (Turkish Red Crescent) and Yeşilay
Income from software, engineering, education, and health services provided abroad
Interest deduction due to cash capital increase
Incomes of institutions operating in the Istanbul Finance Center (IFC)
Investment allowance
Techno-entrepreneurship capital support
Technopark capital support
An Example
To illustrate everything you should know about Minimum Alternate Tax in Turkey, let's consider an example:
Company (E) A.S. has a commercial balance sheet profit of 15,000,000 TL for the 2025 accounting period, a profit exemption of 5,000,000 TL obtained from exchange-protected deposit accounts, and past years' losses of 5,000,000 TL. The company holds an investment incentive certificate obtained before August 2, 2024, allowing it to apply a reduced corporate tax rate on a base of 2,000,000 TL for the 2025 accounting period. The reduced tax rate is 5%.
Calculation:
| Corporate Tax | Minimum Alternate Tax |
| Commercial Balance Sheet Profit | 15,000,000 TL |
| Exemptions | |
| - Profit exemption from exchange-protected accounts | (5,000,000 TL) |
| Past Years' Losses | (5,000,000 TL) |
| Tax Base for Reduced Rate | |
| - (2,000,000 TL * 5%) | 100,000 TL |
| Tax Not Collected According to Incentive Certificate | - (2,000,000 TL * 20%) |
| 400,000 TL | |
| Tax Calculated on General Rate Base | |
| - (3,000,000 TL * 25%) | 750,000 TL |
| Total Calculated Corporate Tax | 850,000 TL |
| Minimum Alternate Tax | 1,100,000 TL |
Explanation:
Everything you should know about Minimum Alternate Tax in Turkey is that the Minimum Alternate Tax is calculated as 10% of the corporate income before deductions and exemptions:
- (15,000,000 TL * 10%) = 1,500,000 TL
After deducting the 400,000 TL tax not collected due to the incentive certificate under Article 32/A, the Minimum Alternate Tax is:
- 1,500,000 TL - 400,000 TL = 1,100,000 TL
Since the Minimum Alternate Tax amount (1,100,000 TL) is higher than the calculated corporate tax (850,000 TL), the tax payable will be 1,100,000 TL.
How Is the minimum domestic corporate tax Calculated for Taxpayers Not Benefiting from Exemptions and Deductions?
Understanding everything you should know about Minimum Alternate Tax in Turkey also involves knowing how the tax is calculated for taxpayers not benefiting from exemptions and deductions.
When There Is a Commercial Balance Sheet Profit:
Company (Demir) A.S. has a commercial balance sheet profit of 2,000,000 TL and non-deductible expenses of 300,000 TL for the 2025 accounting period.
Calculation:
| Corporate Tax | Minimum Alternate Tax |
| Commercial Balance Sheet Profit | 2,000,000 TL |
| Non-Deductible Expenses | 300,000 TL |
| Exemptions and Deductions | 0 |
| Corporate Tax Base | 2,300,000 TL |
| Calculated Corporate Tax | |
| - (2,300,000 TL * 25%) | 575,000 TL |
| Minimum Alternate Tax | |
| - (2,300,000 TL * 10%) | 230,000 TL |
Explanation:
Since the calculated corporate tax (575,000 TL) is higher than the Minimum Alternate Tax (230,000 TL), the tax payable will be 575,000 TL.
When There Is a Commercial Balance Sheet Loss:
Company (X) A.S. has a commercial balance sheet loss of 500,000 TL and non-deductible expenses of 1,500,000 TL for the 2025 accounting period.
Calculation:
| Corporate Tax | Minimum Alternate Tax |
| Commercial Balance Sheet Loss | (500,000 TL) |
| Non-Deductible Expenses | 1,500,000 TL |
| Exemptions and Deductions | 0 |
| Corporate Tax Base | 1,000,000 TL |
| Calculated Corporate Tax | |
| - (1,000,000 TL * 25%) | 250,000 TL |
| Minimum Alternate Tax | |
| - (1,000,000 TL * 10%) | 100,000 TL |
Explanation:
Everything you should know about Minimum Alternate Tax in Turkey includes that since Company (X) A.S. does not have exemptions, deductions, or past years' losses, and the calculated corporate tax (250,000 TL) is higher than the Minimum Alternate Tax (100,000 TL), the tax payable will be 250,000 TL.
For Taxpayers with No Tax Base
The term "corporate income before deductions and exemptions" refers to the amount found by adding non-deductible expenses to the commercial balance sheet profit or loss at the end of the accounting period. Everything you should know about Minimum Alternate Tax in Turkey is that the Minimum Alternate Tax calculation will be made in cases where the sum of the commercial balance sheet profit and non-deductible expenses or the sum of the commercial balance sheet loss and non-deductible expenses is greater than zero.
We hope this clarifies everything you should know about Minimum Alternate Tax in Turkey. For further questions or detailed calculations specific to your company's situation, please consult with a tax professional.
Contact Us
At Ozm-Consultancy, our dedicated team of tax experts is ready to assist you in navigating the complexities of the new Minimum Alternate Tax regulation. With our in-depth industry knowledge and personalized approach, we can help ensure your company remains compliant while optimizing your tax strategy.
Get in touch with us today to discuss how these changes may affect your business and how we can support you in adapting to this new tax landscape.
Email: info@ozmconsultancy.com
Phone: +90 (216) 352 29 61
Website: www.ozmconsultancy.com
Your trusted partner in financial success.
