Reduced Corporate Tax for Manufacturers in Türkiye: What Circular 26 Changes for Foreign-Owned Operations

If your Türkiye subsidiary manufactures or exports, a change published in the Official Gazette on 4 July 2026 (No. 33300) deserves your attention. Corporate Tax General Communiqué Series No. 26 confirmed that the tax reduction applied to production earnings will rise sharply from the 2027 accounting period. For foreign operators used to a flat headline rate, this introduces a nuance that directly affects cash tax — provided your accounting can support it.

What Circular 26 actually changed

Türkiye's standard corporate income tax rate is 25%. Companies holding an industrial registry certificate (sanayi sicil belgesi) and actually engaged in production currently apply a 1-point reduction on income earned exclusively from production activity — bringing that income to 24%.

Circular 26 confirms that this reduction increases to 12.5 points from the 2027 accounting period onward. In practice, a certificate-holding manufacturer's income from production activity will be taxed at 12.5% instead of 24%. The reduction covers not only industrial producers but also companies engaged in agricultural production activity.

The export reduction stays — but does not stack

The 5-point export reduction is preserved. Income earned exclusively from exports is taxed 5 points lower, at 20%. The critical rule for a company that both manufactures and exports its goods: the two reductions do not combine on the same income. For income tied to exported production, the higher reduction (5 points) applies; for the portion of production sold domestically, the production reduction applies.

This distinction becomes more consequential in 2027. Once the production reduction jumps to 12.5 points, the rate gap between domestic production sales and export sales shifts — so correctly attributing which income comes from which channel changes the tax you owe.

You cannot claim the reduction if you cannot separate the income

Here is the point most operators miss: the reduction applies not to total revenue but to income earned exclusively from the qualifying activity. If your entity both manufactures and resells traded goods, you must separate production income from trading income. Likewise, export income must be computed separately from domestic-sale income.

Practically, that requires:

• On the revenue side: sales tracked by activity type (production / trade / service) and by market (domestic / export)
• On the cost side: cost of goods manufactured tracked separately from cost of traded goods sold
• On overhead: shared costs allocated across activities on a consistent, defensible key

In spreadsheets this separation is both error-prone and hard to defend in an inspection. This is where an ERP's cost accounting and income-segmentation layer earns its place. Birasyo's accounting module classifies sales and costs by activity and market so that reduction-eligible income is both calculable and auditable.

Don't forget the domestic minimum corporate tax

A crucial caveat: under Law No. 7524, Türkiye applies a domestic minimum corporate tax from 1 January 2025. The calculated corporate tax cannot be lower than 10% of corporate income before deductions and exemptions.

So even after the production reduction reaches 12.5 points in 2027, a reduced rate cannot push you below that floor. There is an important offset, though: the tax not collected because of the production (1 point / 12.5 points from 2027), export (5 points) and IPO (2 points) reductions is taken into account in the minimum-tax comparison. The reduction is not lost — but your final tax must be assessed on both layers together. That two-layer calculation is exactly where a systematic accounting base pays off.

Changed rates at a glance

Income type	Reduction	Applied CIT rate
Standard corporate income	—	25%
Production income (2026)	1 point	24%
Production income (from 2027)	12.5 points	12.5%
Export income	5 points	20%
Domestic minimum corporate tax base	—	At least 10%

Rates shown assume the standard 25% corporate tax rate. Banks and certain financial institutions have a different standard rate. Confirm your specific position with your Turkish CPA (mali müşavir).

What to do, and when

• For 2026: production income carries a 1-point reduction, export income a 5-point reduction. Start tracking income by activity and market now.
• For the 2027 transition: because the production reduction rises to 12.5 points, separating production income from trading income will create a much larger monetary difference. Get your accounting and costing structure ready before the 2027 opening.
• If you use a free zone: Circular 26 also broadened the free-zone exemption from 1/1/2026 to cover sales made into the free zone or to other free zones — review it with your CPA.

Summary

Corporate Tax General Communiqué No. 26 (4 July 2026) raises the production-income reduction from 1 to 12.5 points effective from the 2027 accounting period, bringing the rate on a certificate-holding manufacturer's production income to 12.5%. The 5-point export reduction is preserved and does not stack with the production reduction on the same income. The free-zone exemption widened from 1/1/2026. Because a 10% domestic minimum corporate tax floor remains in force, the reduced rate is one layer of a two-layer calculation, not a final answer. The prerequisite for capturing any of these reductions is the ability to track production, trading and export income separately and defensibly — most practically achieved by running cost accounting inside your ERP.

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Sources: Corporate Tax General Communiqué Series No. 26 (Official Gazette, 4 July 2026, No. 33300); Law No. 7524 (domestic minimum corporate tax); Turkish Revenue Administration (GİB) 2026 Domestic Minimum Corporate Tax Guide. This article is general information only; confirm rates, dates and scope for your specific case with your Turkish CPA.