100% Tax Deduction for Service Exports in Türkiye
Türkiye Expands Tax Incentives for Service Exports up to 100%
A new Presidential Decree in Türkiye has introduced significant changes to the tax incentive system for companies exporting services and receiving income from foreign subsidiaries. The reform is aimed at increasing foreign currency inflows, encouraging capital repatriation, and strengthening Türkiye’s position as a global service hub.
The key change is the increase of the tax deduction for service exports from 80% to 100%.
100% Tax Deduction for Exported Services
Previously, companies exporting services from Türkiye could apply an 80% tax deduction on qualifying income. Under the new rules, this deduction has been increased to 100%, provided that the full amount of income is transferred back to Türkiye.
Important condition: the income earned abroad must be fully transferred to a Turkish bank account.
Sectors Eligible for the 100% Deduction
- Architecture and engineering design
- Design services
- IT and software development
- Education services
- Healthcare services
- Other qualified export services
This measure primarily targets professionals and companies that provide intellectual and digital services to foreign clients while operating from Türkiye.
New Rules for Foreign Subsidiaries
The Decree also introduces major improvements for Turkish companies that own foreign subsidiaries and receive income from them.
- The minimum ownership requirement has been reduced from 50% to 20%
- The tax exemption on income from foreign subsidiaries has been increased up to 80%
- The new rules apply to income generated from the year 2026
These changes significantly lower the barrier for Turkish companies to operate internationally while benefiting from domestic tax advantages.
Purpose of the Reform
The reform is designed to bring capital back into Türkiye, increase foreign currency revenues, and support the growth of service exports.
By offering full tax deductions for service exports and improved conditions for foreign subsidiary income, Türkiye is positioning itself as one of the most attractive jurisdictions for service-based businesses working with international markets.
