Strategic tax reductions of up to 5% are now fully operational in 2026 to boost Türkiye’s global trade competitiveness.
To align with the 2024-2026 Medium-Term Program (MTP), Türkiye has decisively pivoted its fiscal policy toward rewarding productivity and international trade. In 2026, the nation’s corporate tax landscape features one of the most aggressive “export-incentive” structures in the OECD. While the standard Corporate Income Tax (CIT) rate stands at 25%, the government has implemented deep, targeted reductions for those who drive the country’s foreign trade.
Companies engaged exclusively in export activities now benefit from a 5% reduction in their corporate tax rate. This effectively lowers their CIT to 20% for all income derived from exports. This is not a temporary measure but a structural pillar of the “Resilient Partner” strategy aimed at making Türkiye a global manufacturing powerhouse. For a sourcing manager in Europe or North America, this lower tax burden on Turkish suppliers translates into more stable pricing, as manufacturers can absorb global inflationary pressures better than their peers in higher-tax jurisdictions.
Manufacturing firms that hold an “Industrial Registration Certificate” also enjoy a competitive edge. They receive a 1% CIT reduction on their production earnings, bringing their effective rate down to 24%. When a company is both a manufacturer and an exporter, the 5% reduction takes precedence for the portion of the income generated through exports, ensuring that the highest possible benefit is applied.
In early 2026, the Turkish government added another layer of support by extending the corporate tax reduction period for specific investment incentives. This ensures that the benefits are not front-loaded but provide a long-term “fiscal shield” for large-scale industrial projects. However, it is important for sourcing professionals to note a significant change as of January 1, 2026: the long-standing VAT exemption for domestically sourced inputs under the “inward processing procedure” has expired. Exporters must now pay VAT on domestic purchases and seek refunds through standard processes. While this increases short-term liquidity needs for SMEs, it is part of a broader move toward fiscal transparency and alignment with global tax standards, ensuring that only genuine, high-value exporters receive the 5% CIT benefit.
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