As of July 2024, there are key developments in Turkish business structures and taxation that foreign investors and entrepreneurs should be aware of. Here’s a quick breakdown:
- Corporate Tax Rate Increase: The general corporate income tax rate has risen to 25%. However, companies in the financial sector (banks, insurance, etc.) still face a higher rate of 30%.
- Reduced Withholding Tax: The government introduced a welcome change by lowering the withholding tax rate on dividends to 10%.
- IPO Incentive: Companies (excluding finance) that offer at least 20% of their shares through an initial public offering (IPO) on the Istanbul Stock Exchange can benefit from a reduced corporate tax rate of 23% for five years after the IPO.
- VAT Rates Remain: The standard Value Added Tax (VAT) rates in Turkey are still set at 1%, 10%, and 20%, applicable to various goods and services.
This is just a high-level overview. For a comprehensive understanding of Turkish business structures and taxation, it’s crucial to consult with a professional CPA accounting and law firm.
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