Turkey to Introduce 10% Minimum Corporate Tax Rate from 2025
Turkey plans to introduce a minimum corporate tax rate of 10% starting from 2025, aiming to reduce its budget deficit. According to a decree published over the weekend, the corporate profit tax rate will be at least 10% before deductions and exemptions are applied.
These changes are part of the government's efforts to strengthen the country's public finances. Fiscal measures are seen as a necessary step to support monetary tightening in the face of high inflation. In light of these changes, the government has revised its budget deficit forecast for next year to 3.1% of GDP, down from a previous estimate of 3.4%. For 2024, the government predicts a deficit of 4.9%.
Profits from construction-operation-transfer projects and public-private partnerships will now be taxed at 30%. The tax exemption on the sale of real estate owned by companies has also been abolished.
This confirms the global trend of increasingly taxing corporate profits to combat deficits caused by growing government intervention. The COVID-19 pandemic and the war in Ukraine have affected all economies without exception, while budget deficits are leading to unsustainable debt. Achieving balance has become a nearly impossible mission for everyone.
