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2025/21 Financial/Tax Bulletin (March & April 2025)

Find out the latest developments in tax regulations and be updated on regulatory changes along with their effects on your business through our tax bulletins.  

In this bulletin, we have compiled for you the current important financial developments, recent legislative changes, critical tax issues that may directly concern your sector, and details that will shed light on the upcoming period. The Climate Law submitted to the Parliament, the requirement of identity in crypto asset transactions, the obligations imposed on crypto asset companies by SPK (SEC), updated on the consumer credit limits by the BRSA (BDDK), the obligation to sell foreign exchange reduction to 25% by the TCMB (CBRT) and the scope reduction started in the ban on foreign exchange contracts, new double tax treaties, decreased withholding rate for construction and an important change made in the VAT refund system are among the important agenda items of this month.

In addition, as special related topics in this bulletin; the announcement made regarding the Pillar I B amount by the Tax Authority, the decision of the Council of State to stay the execution regarding the “minimum corporate tax” to be applied this year, the regulations made in electronic commerce and the items considered as discounts in the license fee, and the monitoring and mandatory use of certain special systems regarding commercial vehicles such as taxi and buses.

As always, we start with Tax issues.

Major Tax Issues

Corporate Tax Return season has just started in April for corporate income taxpayers.

• We will hold a webinar about hot topics on April 16th.
• If you want to join us, please let us know.
• Tax declarations will be submitted from April 1st to the 30th of April 2025.
• Tax Authority explains the important items in Corporate Tax Guide 2025.
• Important matters are summarized below for FY24 corporate tax returns:
  • Inflation accounting and some controversial issues will be crucial this year.
  • Financial expense restrictions will be important even the Tax Court did not give good news for the taxpayers who went to the Court.
  • %50 tax deduction rate is increased to %80 for those who served specific services to the clients abroad if all the earnings are brought to Türkiye. This rate increase had already started for corporate taxpayers in 2023.
  • %05 “lump sum expenditure allowance” will not be used starting from 2024 for exporters. So, 2023 was the last year to use this application in tax returns.
  • %5 export-sourced corporate tax deduction can be used by intermediate firms as well.
  • Participation exemption system for foreign sourced dividends is eased in 2024.
  • The new amendment gives %50 exemption rather than full exemption with lighter conditions. Dividends should be remitted to Türkiye by the date corporate income tax is due in this exemption.

Inflation adjustment will be used all the taxpayers in Türkiye for FY24.

• Communique number 555 of Tax Procedural Law was published before for the inflation accounting starting to be applied for FY23 and FY24.
• Circular number 165 and 176 were published by the Tax Authority on important questions.
• In summary, there is no threshold so far in terms of the size of the balance sheet or number of employees for the application for FY24.
  • B/S for FY23 was adjusted and it had no corporate tax effects.
  • FY24 and coming years will be adjusted in every quarter till the inflation decreases and there will be tax effects either increasing the profit or loss for the companies.
  • Inventory / tangible asset rich firms will pay tax and capital intense firms will create deductible losses in general.
  • There is no VAT effect if the inventory/assets are kept.
  • As debts and credits will not be adjusted but the capital adjusted, then “finance expense limitation” will be eased for indebted firms.

You should double-check the corporate tax rates as they become more complex.

• Corporate tax rate depends on the FY year, type of the companies (financial or non-financial), the main activities (industrial/exporting) and whether it is publicly listed or not and type/region of the investment incentive certificates if there is any.
• There might be some gray areas in practice that you should ask for advice.

The notional interest rate on the 2024 cash capital discount is revised as 55.58%.

• New capital injection will enjoy this “notional deduction” depending on the capital’s origin.
• Foreign capital will be deducted at a rate of 75%. Domestic capital will be deducted at a rate of 50%. It is super incentive for FDI to Turkiye.

New Tax Law is published in the official gazette.

• State-owned banks and firms should pay additional fees to support the KOSGEB.
• The rate of the fee is different for the banks and other firms.

Tax declaration deadlines are ending for income tax in Türkiye.

• Income tax returns for FY2024 should be filed for the taxpayers online.
• Taxpayers should file their returns electronically by the 7th of April.
• You can visit Tax Brochures prepared by Turkish Tax Authority in English.

Tax Treaty with Cuba is ready to come to the Parliament.

• It was signed in 2024 in Ankara and has 31 articles.

New Türkiye - Azerbaijan tax treaty is coming to the Parliament after Commission’s approval.

Angel investors can use tax exemption in their tax returns.

Withholding corporate tax rate is decreased to 1% from 5% for construction / repair projects including vessels, railways and metro and similar systems. A new rate will be used starting on April 1st, 2025. 

Tax-free Foundations (NGO) are to submit “Exemption Reports” in March

Social Security

Amendments accepted in Parliament for retirement bonus and “birth aid” for the kids to the families.

• Law number 7456 changed the minimum wage for retired people. Financial aid is redefined for the first, second and more kids born after January 1st, 2025. Government will give one off aid for the first kid, monthly aid for the second, third and more for 5 years.
• Fertility rate was 2.38 children in 2001, this figure was 1.51 children in 2023 in Türkiye.

The Communique regarding with minimum wage support is published.

• Minimum wage support law, which is number 7539, is published.
• The minimum salary support for 2025 is updated to TRY 1000.

Banking & Finance

The Central Bank decided to keep interest rates at 42,5%.

• The Monetary Policy Committee (the Committee) has decided to keep the policy rate (the one-week repo auction rate) constant at 42,5 percent.
• The Committee has decided to raise the Central Bank overnight lending rate to 46 percent.

The SPK regulations on Crypto Assets have been published.

• The Communiqué (III-35/B.1) covers the procedures and principles regarding the establishment of crypto asset service providers, their founders, managers, partners and personnel, their operating principles, organization, liabilities, share transfers, information systems and technological infrastructures, outsourcing, and transactions they cannot perform, document recording systems, internal audit, internal control and risk management systems and the temporary or permanent suspension of their activities.

TRY payment necessity is eased for some transactions with a Circular.

• Contract and payment in other currencies are strict in Türkiye starting from 2018 with a Presidential Decree. In time, there are some exceptions and ease, but this legislation is still very crucial. You can read more about the Decree and Circular in our newsletter. 
• As you can read more details in the bulletin; other than vehicle sales, firms are able to deal with and sign contracts in other currencies. But even in this case, payment must be made in TRY. There are some exceptions. Those exemptions are clarified with a new Circular. In April 2022 a new Circular was announced in the original Circular.
• In February 2024 a new Circular was published, and some exemptions were announced in terms of the payment in TRY. Those are the invoices before April 19th, 2022, payment in free zones and payment between the specific export mediation firms.
• With a new amendment dated March 6th, 2025, sales of goods other than motor vehicles are allowed to be sold and contract in foreign exchange currency payment.

Important updates have been made to Decision No. 32 about Turkish Lira and monetary issues.

• The amount of Turkish Lira that can be taken abroad has been increased. This limit, which was applied as 25 thousand TL, has been changed to 185,000 TL.
• The issue of making derivative transactions and transferring them through banks has been regulated.
• The issue of collateral for foreign exchange and precious metal loans has been explained.

R&D and Incentives

Fund allocation requirement for R&D incentives is still ongoing.

• It will be calculated on the tax exemption of R&D and Technopark firms.
• This requirement will be 3% this year.
• You can read an article written by Taxia Partner Şaban Küçük regarding with the “collective investment vehicles” in Türkiye.

Commercial Regulations

The compulsory sales rate for export foreign exchange has been reduced from 30% to 25%.

Climate Law in Parliament

• The new proposal aims to reduce greenhouse gas emissions in the context of combating climate change, and to regulate the legal and institutional framework of climate change adaptation activities, planning and implementation tools, revenues to be used in combating climate change, and the principles of permitting and inspection.
• The Law is accepted in the Commission with minor revisions and amendments.
• You can see more regarding with the recent updates on green and climate in Türkiye by clicking the official web site of the Directorate of the Climate Change.

Miscellaneous

The Council of State has given an important stay of execution in the domestic minimum corporate application in corporate tax circular.

• One of the most important issues in the minimum corporate tax which will be implemented in 2025 was the issue of the previous year’s losses. The regulation of the Circular, which stipulates that previous year losses are not allowed to be deducted when calculating the minimum tax, has been stayed by the Court.
• Upon the objection of the Ministry of Finance, the General Assembly of the Council of State Tax Case Departments will make the final decision.

Best regards,

Taxademy