Import Procedures

Turkish documentation procedures require that a commercial invoice and bill of lading or airway bill accompany all commercial shipments. Depending on the type of product, importers may be required to submit a Certificate of Origin.

An importer needs only a tax number to import all but restricted items, which include firearms, hazardous materials, and other products that may be imported by authorized establishments only or for which approval from relevant Turkish government agencies are required.

In accordance with the import regime enacted in December 2011, Control Certificates are required only for animals, animal products, and certain plants such as seeds, seedlings, saplings and flower bulbs.
Companies selling to the Turkish market must submit evidence of conformity compliance (CE Mark).

For further information, click here to view the website of the Ministry of Trade.

Specific Import Procedures

Alcohol can be imported by the private sector by obtaining license and permission from the Tobacco Products and Alcoholic Drinks Market Regulatory Authority (TAPDK), an independent regulatory body. Nevertheless, non-tariff barriers, arduous documentation requirements, and high duty rates continue to limit trade in alcoholic beverages.  Cigarettes can only be imported by cigarette producers, which are permitted by the government under a special decree.
Precious metals may only be imported by members of Istanbul Precious Metals Exchange operating under Borsa Istanbul.
Importing products such as pharmaceuticals require control certificates from the Ministry of Health and Ministry of Agriculture.
Imports of food products into Turkey are permitted only if they conform to regulations related to import controls and the Turkish Food Codex.
Products requiring after-sales service require an import permit from the Ministry of Trade.

Distribution channels

The Republic of Turkey has a young population of 85.3 million people fueling consumption. Grocery sales were USD 76 billion as of the end of 2021 (USDA).
As a result of low presence of organized or modern retailers in smaller towns and villages, traditional grocery retailers such as bakkals (traditional small grocery shops) and pazars (street produce markets), are still the main way of grocery shopping in those places. As the food retail market is very price-sensitive and the profit margins are low, domestic grocery store chains will probably continue to dominate the Turkish market at least for the near term. The traditional grocery retailers accounted for 38.6% of the total revenues in the retail sector in 2021, reaching USD 27 billion.

However, the market share of the modern organized grocery retailers is increasing. Supermarkets continue to dominate the modern food retail sector, with 31.8% market shares (USD 22.3 billion in sales) in 2021. Discounters represent 24.8% of the grocery retailers (USD 17.4 billion in revenues). Convenience stores and hypermarkets accounted for 2.5% and 1.4% of market share each.

Consumers have started to prefer hard discounters or discounters offering private label products, which are on average 30% cheaper than the name brand. Discount grocery retailers such as BIM and A101, are transforming the market and are opening up compact stores everywhere. Grocery supermarket retailers such as Migros and CarrefourSA are opening smaller convenience stores like M-Jet and CarrefourSA Express to compete.

High value imported items are increasing in number and variety in national and international hypermarkets like Migros, Metro, Carrefour and others which cater to higher income consumers.

During the COVID19 pandemic, with the first case declared on March 11th, 2020 in Turkey, grocery stores remained open and operational while shopping malls closed down. Reportedly, major grocery chains have had record sales turnovers of food and beverages due to the pandemic, especially before the mandatory weekend lockdowns in major cities in Turkey. The pandemic situation has given all online grocery retailers a major boost. Migros is the online market leader.

Distribution market players

The food retail sector in Turkey can be put into two major groups: organised and unorganised retailers. Organised retailers include multi-format retailers, local (regional) supermarkets, discount retailers, and gas station stores. Unorganised retailers, also called the traditional market, constitute smaller, individual convenience stores called bakkal in Turkish and open-air bazaars. The top 10 grocery store chains by market shares in 2021 (USDA) :

•    BIM with 18.7% market shares - discount market chain
•    A 101 with 12.0% - hard discount market chain
•    Migros with 9.2% - multi-format supermarket chain
•    Sok with 8.3% - discount market chain
•    CarrefourSA with 2.6% - joint venture of Carrefour of France and Sabanci Holding of Turkey
•    Sec Market with 1%
•    Ekomini with 0.9%
•    Hakmar with 0.8%
•    MacroCenter with 0.6%
•    Onur Market with 0.6%

Retail Sector Organisations

Turkish Federation of Shopping Centres and Retailers (TAMPF)
Retailers Council of Istanbul

Consumption Taxes

Nature of the Tax

Katma Deger Vergisi (KDV) or Value-Added Tax (VAT)

Tax Rate

General VAT rate in Turkey isset at 20% (since July 2023).

Reduced Tax Rate

Examples of goods and services taxable at 1%: newspapers and magazines, basic foodstuffs, and used passenger cars.
Examples of goods and services taxable at 10%: foodstuffs, textile products, pharmaceuticals, medical products, some construction equipment, and admission charges for cinemas, theaters and operas.

Other Consumption Taxes

OTV or Özel Tüketim Vergisi is a special consumption tax levied on petroleum products, automobiles and other vehicles, tobacco and alcohol and luxury products. Telecommunication services are subject to a special communication tax (Özel İletişim Vergisi).
Motor vehicle taxes are collected as fixed amounts on an annual basis, calculated from the age and engine capacity of the vehicles.

A "tourism share" is levied on designated enterprises at rates of 0.2%, 0.5%, and 0.05% of total net sales and leasing income from individual investors, legal entity investors, or operators of commercial tourism enterprises. These rates are halved for revenue from tourism sectors with special incentives, such as winter, thermal, health, rural, or sports tourism. The share does not apply to sea tourism vehicles with a Tourism Administration Certificate.

Additionally, a 2% tax is imposed on specific accommodation services and other amenities like food and beverage, activities, entertainment, swimming pool access, sports facilities, and thermal services provided by hotels, motels, holiday villages, hostels, apartment hotels, guest houses, camping sites, chalets, or mountain houses.

Corporate Taxes

Company Tax

Following the Law number 7456 published in 15 July 2023, the corporate income tax rate has been increased to 25% from 20% for companies other than those in the financial sector.

Tax Rate For Foreign Companies

A company is regarded as a resident entity for Turkish tax purpose if it has its legal seat or place of management located within the country.

Capital Gains Taxation

Capital gains derived by a company are generally taxable as ordinary corporate income. However, exemptions apply as follows: (i) 75% of capital gains from the sale of participations and (ii) 25% of capital gains from the sale of immovable property acquired before 15 July 2023, are exempt from corporate income tax if the following conditions are met:
- The participation or property has been held for at least two years;
- The gains are retained in a special fund account under shareholders’ equity for five years following the year of the sale and are not transferred to another account within this period, except for transfers to the capital account by way of a capital injection;
- The consideration for the sale is collected by the end of the second calendar year following the year of the sale; and
- The company does not hold the participation or property for the purpose of ordinary business involving the trading of participations or properties.

Capital gains derived by an international holding company from the sale of foreign participations are exempt from corporate income tax, provided the foreign participation has been held for at least two years. To qualify as an “international holding company,” a resident company must meet the following requirements:
- It must be a joint stock company;
- At least 75% of its total assets (excluding cash items) must consist of foreign participations held for a continuous period of at least one year;
- It must hold at least 10% of the capital of each foreign participation; and
- The foreign participation must be in the form of a joint stock company or limited liability company.

Main Allowable Deductions and Tax Credits

Expenses that can be deducted from the corporation tax base include ordinary and necessary expenses incurred in the course of general business, real property tax related to business, bad debts, and expenses for research and development. An allowance is available until the end of 2028 to companies that carry out qualifying R&D and design activities (100% of expenditure in addition to a deduction for such expenditure in the statutory accounts). Moreover, 80% of the income tax computed on the wages of R&D and design personnel is exempt from income withholding tax (the rate is increased to 95% for employees with a PhD or master’s degree in fundamental sciences, and 90% for employees with a master’s degree in any field or an undergraduate degree in fundamental sciences). Companies are also exempt from stamp duty on any R&D-related documents and goods imported to this end are exempt from customs duties. In addition, an increase in R&D expenditure compared to the previous year (at least by 20%) gives rise to further deductions.

Start-up expenses are considered deductible expenses as incurred. Moreover, the taxpayer has the option to capitalise such expenses and depreciate them over five years in equal amounts.

Donations to listed charities and for the construction of schools, hospitals, and scientific research organisations are deductible at up to 5% of the company’s gross profit. Under certain conditions, payments for pensions and employee termination benefits are deductible for corporate income tax purposes.

"Strategic" investments (as determined by the government, such as investment in the production of products that rely heavily on imports) give rise to a deduction of up to 100% of corporate tax, along with several other advantages concerning customs duties, employer's social security contributions, etc.
Profits arising from software, design, and research and development (R&D) activities conducted solely within Technological Development Zones are exempt from corporate income tax until 31 December 2028. Companies (excluding banks, financial institutions, insurance companies, and pension funds) that offer at least 20% of their shares through their initial public offering (IPO) on the Istanbul stock exchange are eligible for a corporate income tax rate reduction by two percentage points for a period of five years, commencing from the year of the IPO. Export-oriented companies benefit from a 5% reduction in corporate income tax on earnings derived exclusively from export activities, while manufacturing firms enjoy a 1% reduction in corporate income tax on earnings solely derived from manufacturing activities.

A notional interest deduction (NID) is offered, amounting to 50% of the interest calculated on cash increments in registered capital (for existing companies) or cash capital contributions (for newly incorporated companies), based on the average interest rate announced by the Central Bank for Turkish Lira-denominated commercial loans. This deduction becomes applicable from the fiscal year in which the resolution for the cash capital increase is registered and is restricted to the subsequent four fiscal years. However, for cash capital increases made on or after 26 October 2021, funded with cash from abroad, the NID rate is increased to 75%. Notably, this deduction is unavailable for entities operating in the finance, banking, and insurance sectors, as well as public economic enterprises.

Tax losses can be carried forward for up to five years. The carryback of losses is prohibited. Charges for royalties and interest paid to foreign affiliates may be deductible for corporate income tax purposes when transfer pricing and thin capitalisation rules are followed.

For further information on available tax incentives, consult the dedicated page on the Revenue Administration portal.

Other Corporate Taxes

Real estate tax is levied based on the assessed value of land or buildings, with rates set at 0.2% for buildings, 0.1% for dwellings, 0.1% for land, and 0.3% for building sites. These rates are doubled for properties situated within larger cities. The valuation of buildings relies on square meter rates, which vary according to the property's location. Additionally, landlords must contribute 10% of the annual accrued real estate tax to the municipality for the protection of immovable cultural property; this contribution is collected alongside the real estate tax. Furthermore, municipalities impose an environmental tax on buildings utilized for various purposes, including commercial activities. The tax is applied in fixed amounts, updated annually based on specified categories. The responsibility for paying the environmental tax falls on the resident of the building, be it the landlord or the tenant.
Real estate transfers are subject to a tax calculated as 4% of the acquisition/transfer value, which is split equally between the buyer and the seller.

Stamp tax applies to a wide range of documents, including, financial statements, and payrolls. Stamp tax is levied as a percentage of the value stated on the agreements at rates varying between 0.189% and 0.948%. Salary payments are subject to stamp tax at a rate of 0.759% over the gross amounts.

Turkey levies a "Digital Service Tax" of 7.5% on service providers whose revenue derived from digital services during the previous fiscal year exceeds TRY 20 million in Turkey or EUR 750 million worldwide. The president is authorized to double the rate or reduce it to 1%, depending on the type of digital service.

A banking and insurance transaction tax is imposed at a standard rate of 5% on charges levied by banks and insurance companies. Banks are mandated to deduct a contribution to the resource utilization support fund (RUSF) from the principal amounts of foreign-denominated loans with an average maturity period of three years or less. The contribution rates vary: 3% for loans with an average maturity period of less than one year, 1% for loans with a maturity period of at least one year but less than two years, and 0.5% for loans with a maturity period of at least two years but less than three years. Loans with an average maturity of three years or more are exempt from the RUSF. Additionally, a 1% contribution applies to the interest accrued on Turkish Lira (TRY)-denominated loans with an average maturity of less than one year, while no contribution applies to TRY-denominated loans with an average maturity of one year or more. Imports conducted on credit are subject to a 6% RUSF, with certain exemptions. Moreover, the banking and insurance transaction tax extends to foreign exchange purchases from banks, insurance companies, and foreign exchange offices, at a rate of 0.2%. The Turkish president holds the authority to adjust this rate, reducing it to 0% or increasing it to 2%.

A "tourism share" is levied on designated enterprises at varying rates, namely 0.2%, 0.5%, and 0.05% (recently reduced from 0.075%) of the total net sales and leasing income generated by individual investors, legal entity investors, or operators of commercial tourism enterprises within these establishments, respectively. These rates are halved for revenue stemming from tourism sectors eligible for special incentives, including winter, thermal, health, rural, or qualified sports tourism. Notably, the tourism share does not apply to sea tourism vehicles holding a Tourism Administration Certificate issued by the Ministry of Culture and Tourism.
A 2% tax is imposed on specific accommodation services, as well as other services including food and beverage, activities, entertainment, swimming pool access, sports facilities, thermal services, and similar amenities provided by establishments such as hotels, motels, holiday villages, hostels, apartment hotels, guest houses, camping sites, chalets, or mountain houses.

Social security contributions for both the employer and the employee total 34.5% of an employee’s salary; 14% paid by the employee and 20.5% by the employer. In addition to social security payments, unemployment contribution is 3% of the salary, 1% for the employee and 2% for the employer. The monthly social security ceiling is TRY 150,018 for the period running from 1 January to 31 December 2024.

Other Domestic Resources

Revenue Administration

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed

List of Double Tax Treaties signed by Turkey

Withholding Taxes

Dividends: 0% (resident companies)/10% (resident individuals and non-residents); Interest: 0% (residents and for "financial entities")/10% (interest on loan for non-residents); Royalties: 0% (resident companies)/20% (resident individuals and non-residents)