Circular 2026-035
Amendments Have Been Made to Corporate Tax General Communiqué No. 25 and Corporate Tax General Communiqué No. 1
Explanations have been made regarding the regulations in Law No. 7524, Article 32, and Law No. 7566, Article 2, and in the Income Tax Law and the Corporate Tax Law, with the General Communiqué on Corporate Tax No. 25, published in the Official Gazette dated May 24, 2026, and numbered 33263.
In this notice
- Application of earnings exemption to funds and investment partnerships established in Turkey,
- Carryforward of profits and losses in exceptional applications,
– The application of the interest rate reduction on paid-in capital increase to the fourth provisional taxation period,
– Regarding the calculation of the investment contribution amount to be deducted from the minimum corporate tax
Explanations have been made.
Tax exemption practices for funds and investment partnerships established in Turkey
With Article 1 of the Communiqué, explanatory examples regarding the aforementioned legal regulation have been added to the “5.5. Exemption for the earnings of funds and investment companies established in Turkey” section of the Corporate Tax General Communiqué (Series No: 1).
Accordingly, advance profit shares from earnings obtained as of January 1, 2025, will also be taken into account in the calculation of profit distribution. When calculating the real estate gain on which profit distribution is based, the gain to be determined by deducting the expenses and cost elements incurred due to this activity from the revenue obtained from real estate will be considered.
If the real estate activities or all activities result in a loss, the profit distribution requirement will not apply to the exemption. If the real estate activities result in profit, while other activities result in a loss, and the total profit is lower than the profit obtained from real estate, the distribution of half of the profit will be considered sufficient for the exemption.
As funds and partnerships, which by their nature of operation cannot include real estate in their portfolio or assets and cannot undertake construction projects, will not have the said income, the condition of profit distribution will not be sought for these funds and partnerships.
For funds and partnerships that derive income from real estate in any way to benefit from the exemption, a profit distribution condition will be sought for the said income.
Additionally, the communiqué provides explanations and examples regarding the allocation of common general expenses and depreciation, as well as the determination of distributable profit shares. .
Set-off of profit and loss in exceptional applications
With Article 2 of the Communiqué, the heading “5.18. Evaluation of profits and losses in exemption applications” has been added to the Corporate Tax Communiqué (Serial No: 1). In the said section, exemptions are divided into two categories: “Activity-based exemption” and “Transaction-based exemption”.
According to the communiqué, if the exemption is specific to a certain activity, the relevant activity must be evaluated as a whole, and the profit must be determined within the framework of this entirety. In cases where exemptions are applied on a transaction-by-transaction basis, it has been stated that profit and exemption should be determined for each transaction, and examples have been provided.
Application of interest reduction on cash capital increase in the fourth provisional taxation period
Article 3 of the Communiqué has been amended to allow the application of the interest deduction calculated on the cash capital increase, stipulating that the deduction can be utilized not only based on the annual accounting period but also as of the fourth interim tax period.
Calculation of the investment contribution to be deducted from the minimum corporate tax
With Article 4 of the Communiqué, a section titled “32.5.7. Determination of the Investment Contribution Amount Deducted from Minimum Corporate Tax” was added to the Corporate Tax General Communiqué (Serial No: 1), clarifying that taxpayers who received an incentive certificate before August 2, 2024, and revised it after this date, can determine the taxes not collected according to Article 32/A by considering the investment contribution amount before August 2, 2024, or by proportionality. .
In the example provided in the notice, the calculation method for both approaches is explained in detail.
You can access the mentioned notification via the following link.
Sincerely
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