Turkey will introduce a 10 percent minimum corporate tax for companies starting from 2025 to help narrow its budget deficit, Bloomberg reported.
The domestic minimum tax rate for corporate earnings won’t be below 10 percent before deductions and exemptions, according to a decree published in the Official Gazette by the Treasury and Finance Ministry on Saturday.
The changes in the corporate tax code are a step toward fiscal consolidation and are part of a policy shift overseen by Treasury and Finance Minister Mehmet Şimşek since he took over the nation’s finances following an election last year. Investors see fiscal measures as key to supporting monetary policy in the nation’s fight against inflation.
Since taking over the helm, Şimşek has emphasized that tax laws will be simplified and the scope of tax deductions and exemptions will be reduced.
The government revised down its budget deficit forecast for next year to 3.1 percent of GDP from 3.4 percent previously. For this year, it expects a deficit of 4.9 percent.
The tax rate for earnings from projects built by build-operate-transfer and public-private-partnership models will be 30 percent.
Funds’ corporate tax exemption will be contingent on their distribution of at least 50 percent of their real estate revenues as dividends.
The tax exemption on corporates’ real estate sales will be removed.