Circular 2026 - 031
Tax Regulations Introduced by Law No. 7577
Amendments have also been made to tax legislation with the ‘Law Amending Certain Laws No. 7577,“ published in the Official Gazette dated April 17, 2026, and numbered 33227.
The amendments made to the tax legislation in the law are summarized below.
Advertising and promotional expenses related to chance and betting activities will not be considered as expenses in determining the income and corporate tax base.
The additions made to Article 41 of the Income Tax Law and Article 11 of the Corporate Tax Law, respectively, by Law No. 7577, stipulate that as of April 17, 2026, all advertising and promotion expenses related to games of chance and betting will not be considered deductible expenses in determining the commercial income of income and corporate taxpayers.
The corporate tax exemption granted to healthcare institutions affiliated with foundation universities and the VAT exemption on services provided have been abolished.
With amendments made to Article 2 of the Law and Article 7-Additional of Law No. 2547, the corporate tax exemption for hospitals and similar healthcare institutions operating within foundation universities has been abolished, excluding the exemption provision under Article 4/1-(b) of Law No. 5520.
Also, Article 3 of the Law and the Value Added Tax Law's “Social and Exceptions for Military Purposes and Other Exceptions”In Article 17, paragraph (2), subparagraph (a), the phrase “(except for those operated by higher education institutions established by foundations granted tax exemption by the President)” has been added after the phrase “institutions such as”, thereby abolishing the VAT exemption for services provided by these institutions. It will come into effect as of January 1, 2027.
In the scope of expropriation, a VAT exemption has been introduced for real estate transfers.
With Article 3 of Law No. 7577, an addition was made to paragraph 4 of Article 17 of the VAT Law, titled “Other Exemptions,” exempting the transfer of immovable properties expropriated within the scope of Law No. 2942 on Expropriation, to the State and public legal entities that expropriated them, from VAT as of June 1, 2026.
Taxpayers manufacturing in free zones, The earnings derived from product sales to free zones have been included in the exemption.
Sales made within a free zone or to other free zones have also been included in the scope of the exemption, to be applied to earnings obtained from January 1, 2026, with Article 4 of Law No. 7577.
Accordingly, the profits earned by taxpayers engaged in production activities in free zones, from the sale of their manufactured products abroad or to taxpayers operating in the same or other free zones, will be considered exempt from income and corporate tax.
The subsection that was annulled by the Constitutional Court's decision regarding the ÖTV exemption for vehicle purchases by persons with disabilities has been re-regulated.
The eighth article of Law No. 7577 has amended the sub-clause regarding the Special Consumption Tax (SCT) exemption for vehicle purchases by persons with disabilities as follows, with an effective date of April 17, 2026.
“c) 87.03 (excluding those whose value, including special consumption tax and all other taxes to be calculated, exceeds 2,873,900 TL), 87.04 (excluding those with engine cylinder capacity exceeding 2,800 cm³), and 87.11 G.T.İ.P. numbers, by disabled individuals who have had special driving modifications made for their disability for personal use, and by disabled individuals who have an orthopedic disability of 40% or more according to their disability health board report and cannot obtain a driver's license due to this condition.’
You can access the said Law at the following link.
Sincerely
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