A long-debated issue in corporate taxation was the extent to which exemptions and deductions eroded the tax base. An amendment made in 2024 to Corporate Tax Law No. 5520 responded to this problem with two new instruments: the domestic minimum corporate tax and the global minimum top-up tax for multinational groups.

Domestic minimum corporate tax

Under this provision, the corporate tax calculated may not be less than ten per cent of corporate income before exemptions and deductions are deducted. In other words, however high the exemptions and deductions may be, the tax payable by the company does not fall below a certain floor.

• The provision applies to earnings from the 2025 accounting period onwards.
• The Law provides for certain exceptions, such as the first accounting periods of newly established companies and earnings derived from certain activities.
• Which exemptions and deductions are to be disregarded in calculating the minimum tax is regulated separately. The calculation therefore does not consist merely of applying the rate.

Global minimum top-up tax

In line with the work of the Organisation for Economic Co-operation and Development (OECD) known as “Pillar Two”, an effective tax burden of at least fifteen per cent is targeted for multinational enterprise groups whose consolidated revenue exceeds a certain threshold. In accordance with the international rules, the threshold has been set at consolidated revenue of EUR 750 million in at least two of the last four accounting periods.

If the effective tax rate in a country falls below this level, the difference is collected as a top-up tax. Türkiye’s incorporation of this system into its own legislation enables the difference to be taxed in Türkiye rather than in another country.

Points to consider in practice

• Planning: Companies benefiting from incentives and exemptions need to recalculate the extent to which these advantages are actually preserved in view of the minimum tax.
• Data and reporting: For groups within the scope of the global minimum tax, the calculation requires comprehensive data at group level. The timetable for notification and filing obligations should also be monitored separately.
• Risk of dispute: For new instruments, the administration’s interpretation is shaped by secondary legislation and advance tax rulings. Documenting the calculation assumptions against the possibility of a tax assessment provides a significant advantage in later tax settlement and judicial proceedings.

Assessment

The minimum tax represents a change of direction in tax policy: incentives remain in place, but are limited by a floor. How this new balance will be reflected in companies’ investment decisions will be one of the significant topics of debate in both practice and tax law scholarship in the coming years.