Transit trade in Turkey has become significantly more attractive following the introduction of a new corporate tax incentive. Under recent amendments to the Turkish Corporate Tax Law, companies carrying out qualifying transit trade activities may deduct 95% of their eligible profits from the corporate tax base. For certain businesses operating in designated investment zones, the deduction may increase to 100%.
The new regime can reduce the effective corporate tax burden on qualifying transit trade income to approximately 1%, provided that all statutory requirements are met.
What Is the New Transit Trade in Turkey Tax Incentive?
Article 10 of the Turkish Corporate Tax Law allows companies to deduct 95% of profits generated from qualifying transit trade transactions when calculating their corporate tax base.
The incentive generally covers profits arising from:
- goods purchased from abroad and sold abroad without being imported into Turkey; and
- intermediary or brokerage activities relating to purchases and sales of goods conducted between foreign parties.
The standard deduction rate is 95%.
However, a 100% deduction may apply to qualifying companies operating in certain industrial zones approved based on foreign investment intensity and to entities holding a participant certificate within the Istanbul Financial Center.
Which Transit Trade in Turkey Transactions Qualify?
The incentive is not limited to the traditional purchase and resale of physical goods.
Depending on the nature of the transaction and compliance with the relevant conditions, the regime may also cover:
- international purchases and sales of goods;
- brokerage between foreign buyers and foreign sellers;
- certain digital activation and access codes;
- software and subscription codes;
- game codes and e-pin products; and
- qualifying intellectual property and other intangible rights.
Each transaction must be reviewed according to its commercial substance. Products or rights that function as payment instruments rather than identifiable goods, services, or access rights may fall outside the scope of the incentive.
Conditions for the Transit Trade in Turkey Tax Incentive
The corporate tax deduction is available only where all legal conditions are satisfied.
Goods Must Not Be Imported into Turkey
The goods must not enter free circulation in Turkey.
In practical terms, they must not be nationalized through Turkish customs, imported for domestic use, or sold to a customer located in Turkey.
The goods may pass through Turkey or remain temporarily under customs supervision. However, they must retain their foreign customs status until they are sent to the foreign purchaser.
Proceeds Must Be Transferred to Turkey
The full amount of the income generated from the qualifying transaction must be transferred to Turkey by the deadline for filing the annual corporate tax return for the relevant accounting period.
This timing requirement is a fundamental condition of the deduction.
Where the proceeds are not remitted to Turkey within the prescribed period, the company may lose its right to apply the incentive.
Brokerage Transactions Must Involve Foreign Parties
Where a Turkish company earns income by acting as an intermediary rather than buying and reselling the goods itself, both the seller and the purchaser must be located outside Turkey.
Brokerage relating to a transaction involving a Turkish resident buyer or seller does not qualify under this provision.
Does Transit Trade in Turkey Include Bonded Warehouse Transactions?
The treatment of goods stored in Turkish bonded warehouses is particularly important for international trading companies.
The use of a bonded warehouse does not, by itself, prevent the transaction from qualifying for the corporate tax deduction.
Goods purchased from abroad may be brought into a Turkish bonded warehouse and subsequently sold to another foreign company, provided that:
- the goods are not released into free circulation;
- no import process is completed;
- the goods are not sold to a Turkish customer;
- the goods are not processed or altered in the warehouse; and
- the goods are dispatched abroad after the sale.
A bonded warehouse is a customs-controlled facility in which non-Turkish goods may be stored without being formally imported into Turkey.
If the goods are cleared through customs, imported into Turkey, or sold to a domestic purchaser, the resulting profit will not be eligible for the 95% deduction.
Transit Trade in Turkey and Digital Products
Certain digital products may also qualify for the incentive.
The scope may include:
- activation codes;
- e-pin codes;
- game codes;
- digital product codes;
- software licence keys;
- subscription codes; and
- comparable cards, passwords, or access credentials.
To qualify, the digital product must be purchased from a foreign person or company and resold to another foreign person or company without changing its nature or content.
The code must not be used in Turkey, made available for use in Turkey, or sold to a Turkish resident.
Income earned from acting as an intermediary in the foreign purchase and sale of such digital products may also fall within the regime.
Payment Instruments and Stored-Value Products
Not every digital code qualifies.
The deduction does not apply to products that merely represent purchasing power or operate as a means of payment for future goods or services.
Examples may include:
- digital wallet balances;
- general-purpose gift cards;
- stored-value cards;
- prepaid balances; and
- similar payment instruments.
The distinction depends on whether the code provides access to a specific product or service or merely functions as transferable monetary value.
Transit Trade in Turkey and Intangible Rights
The incentive may also apply to certain international transactions involving intangible rights.
Qualifying rights may include:
- copyrights;
- trademarks;
- patents;
- utility models;
- industrial designs;
- licences;
- publishing rights; and
- similar intellectual property rights.
The right must be acquired from a foreign person or entity and transferred, in its original form, to another foreign person or entity.
It must not be used in Turkey by the purchasing company or by any other Turkish resident.
In addition, following the sale, the seller must no longer retain any disposal right, authority, or continuing control over the transferred intangible asset.
Where the seller continues to use, license, or otherwise control the right after the transaction, the conditions of the deduction may not be satisfied.
When Does the New Incentive Apply?
The new rules apply to corporate tax returns required to be filed from 1 July 2026 onwards.
They cover income earned in tax periods beginning on or after 1 January 2026.
For companies with a special accounting period, the incentive applies to accounting periods beginning on or after 1 January 2026.
In practice, calendar-year taxpayers may begin applying the deduction from the second provisional corporate tax period of 2026.
Provisional corporate tax is Turkey’s advance corporate tax system, under which companies calculate and report taxable income during the year before filing the final annual corporate tax return.
Can the Transit Trade in Turkey Incentive Be Combined with Article 32/7?
Yes.
Article 32/7 of the Turkish Corporate Tax Law provides a five-percentage-point reduction in the corporate tax rate applicable to qualifying transit trade income.
The new 95% deduction under Article 10 and the reduced corporate tax rate under Article 32/7 address different stages of the tax calculation.
The 95% deduction first reduces the taxable corporate income. The reduced corporate tax rate is then applied to the remaining 5% taxable portion.
The legislation does not contain an express restriction preventing the simultaneous application of these two benefits.
Accordingly, where all relevant conditions are met:
- 95% of the qualifying transit trade profit is deducted from the corporate tax base; and
- the remaining taxable profit is subject to the five-point reduced corporate tax rate.
Based on the standard 25% corporate tax rate, the remaining amount may therefore be taxed at 20%.
Interaction with Turkey’s Domestic Minimum Corporate Tax
Turkey has also introduced a Domestic Minimum Corporate Tax regime.
Under the relevant legislative amendment, the deduction granted for qualifying transit trade profits may be taken into account when calculating the corporate income subject to the Domestic Minimum Corporate Tax.
This treatment is significant because it prevents the minimum tax mechanism from automatically cancelling the benefit of the transit trade deduction.
The incentive can therefore remain effective in the minimum corporate tax calculation, subject to the relevant statutory requirements.
Transit Trade in Turkey: Practical Tax Calculation
Assume that a Turkish company purchases goods from a company resident in Germany.
The goods are transported to a bonded warehouse in Turkey and remain under customs supervision. They are not imported or released into free circulation.
The Turkish company subsequently sells the goods to a company resident in Bulgaria and earns a net profit of TRY 3,000,000.
The full proceeds are transferred to Turkey before the annual corporate tax return filing deadline.
The calculation would be as follows:
| Description | Amount |
|---|---|
| Qualifying transit trade profit | TRY 3,000,000 |
| Deductible amount at 95% | TRY 2,850,000 |
| Remaining taxable profit | TRY 150,000 |
| Corporate tax rate under Article 32/7 | 20% |
| Corporate tax payable | TRY 30,000 |
The effective corporate tax burden is therefore:
TRY 30,000 / TRY 3,000,000 = 1%
Without the 95% deduction, applying the standard 25% corporate tax rate to TRY 3,000,000 would result in a tax liability of TRY 750,000.
The combined application of the deduction and the reduced rate therefore creates a substantial tax advantage.
Common Compliance Issues
Companies claiming the transit trade in Turkey incentive must be able to demonstrate that each qualifying condition has been satisfied.
Common compliance risks include:
- failing to separate qualifying transit trade income from other business income;
- failing to allocate related expenses accurately;
- transferring the proceeds to Turkey after the statutory deadline;
- releasing goods into free circulation in Turkey;
- selling the goods to Turkish customers;
- processing or altering goods held in a bonded warehouse;
- using digital codes or intangible rights in Turkey;
- retaining rights over intellectual property after its sale; and
- treating stored-value products or payment instruments as qualifying digital products.
Accounting records should clearly distinguish the revenue, direct costs, expenses, and profit attributable to qualifying transit trade transactions.
Where a company carries out both qualifying and non-qualifying activities, a reliable allocation method is required to support the amount claimed in the corporate tax return.
To maximize the benefits of this incentive, companies should structure their transactions correctly from the outset and ensure that both their customs procedures and accounting records fully comply with the statutory requirements. For businesses engaged in international trade, this incentive should also be considered as part of a broader tax planning strategy in Turkey, helping to optimize the overall corporate tax position while maintaining full compliance with Turkish tax legislation.
Conclusion
The new incentive for transit trade in Turkey creates a substantial corporate tax advantage for companies engaged in international trading activities.
Under the general regime, 95% of qualifying profits may be deducted from the corporate tax base. A 100% deduction may apply to certain companies operating in designated industrial zones or within the Istanbul Financial Center.
When the remaining taxable amount also benefits from the reduced corporate tax rate under Article 32/7, the effective tax burden may fall to approximately 1%.
The availability of the incentive depends on strict compliance with the statutory requirements. Goods must not be imported into Turkey, proceeds must be transferred to Turkey within the required period, brokerage transactions must involve foreign parties, and the relevant accounting records must clearly support the qualifying profit.
For companies using Turkey as a base for international trading operations, the new regime represents a significant development in the Turkish corporate tax framework.