The domestic minimum corporate tax (yurt içi asgari kurumlar vergisi) is not an additional 10% charged on top of the regular corporate tax. A minimum amount is calculated under the principles set by the law and compared with the regular corporate tax. The two calculations do not share the same tax base or the same deductible items. For this reason, the absence of tax under the regular calculation does not mean that the minimum calculation will also produce zero tax.
Legal Nature of the Practice and How It Differs from Other Obligations
The domestic minimum corporate tax is not an independent sales tax added to the company's turnover. It is calculated on the earnings and adjustments defined in the law and then compared with the regular corporate tax. The effect of prior-year losses must be assessed together with the scope of the relevant Council of State decision.
Which Periods and Taxpayers Are Covered?
Article 32/C of the Corporate Tax Law No. 5520 (KVK) applies to earnings for 2025 and later periods; for special accounting periods, the period beginning in the 2025 calendar year is the basis. The rule is assessed for corporate taxpayers. Income tax on sole proprietorships does not directly fall under this article. Companies that begin operations for the first time are subject to a special exclusion for their first three accounting periods. Structures formed through a merger, transfer or change of legal form are not automatically treated as new businesses. [1; Corporate Tax Law No. 5520, Article 32/C]
A distinction matters between an exempt entity and a taxpayer whose earnings are exempt. The special status of the company as a whole must be checked separately for the minimum tax.
To Which Amount of Earnings Is the 10% Rate Applied?
The calculation starts from the concept of corporate earnings before deductions and exemptions. Commercial balance sheet profit and non-deductible expenses (KKEG) form the starting data. The exemptions and deductions that the law allows to be deducted from the minimum tax base are listed separately. This list is not a copy of all the advantages available under the regular corporate tax.
Certain exemptions, such as the domestic participation gains exemption (yurt içi iştirak kazancı istisnası), may remain protected within the scope, and some R&D (Ar-Ge) and technology provisions may too, while the result for other exemptions may differ. Using the exemption for gains on the sale of immovable property, or the exemption for foreign-source earnings, in the regular calculation does not by itself show that the same amount will be deducted in the minimum calculation.
The 2026 amendment made by Law No. 7582 added the deductions under KVK Article 10(1)(i) and (j) to the items that may be considered in the minimum calculation, with their applicable period. For this reason, the list in the spring 2026 guide should not be treated as fixed without checking for later amendments. [Corporate Tax Law No. 5520, Article 32/C/2-b; Law No. 7582, Article 9]
What Does the Council of State Decision Change for Prior-Year Losses?
The full text of the decision of the Third Chamber of the Council of State (Danıştay 3. Daire), dated November 25, 2025, file no. E.2024/5700, decision no. K.2025/4831, annuls the provision that did not allow prior-year losses to be deducted from the minimum tax base. The annulment covers the relevant explanation in section 32.5.4 of the Corporate Tax General Communiqué (Kurumlar Vergisi Genel Tebliği), the seventh paragraph of section 32.5.6, and the parts of examples 3 and 5 that concern prior-year losses. The decision was unanimous. [3]
The court based its decision on the principle of legality of taxation. It held that a tax element not clearly provided for in the law cannot be created through an administrative communiqué, and that the restriction on deducting prior-year losses exceeded the statutory authority. The distinction between real economic expenses and losses of the business on the one hand, and financial losses arising from exemptions or deductions on the other, requires a careful reading of the reasoning. The decision should not be extended to mean that all types of losses may be deducted from the minimum tax base without distinction.
The operative part (hüküm fıkrası) shows that the remedy of appeal (temyiz) is open. Since the outcome of any subsequent legal remedy could not be verified as of the research cut-off of October 9, 2026, this article does not state that the decision has become final. Nevertheless, the existence of an annulment decision whose full text has been verified is a stronger and more concrete legal basis than the decision information in the earlier version, which relied only on a secondary publication.
Which Documents Should Be Read Together in a Loss File?
The year in which the prior-year loss arose, its separate reporting in the returns, the remaining five-year carry-forward period, and the commercial or tax-related cause of the loss must be determined. Under the regular corporate tax, eligibility for offset and eligibility for consideration in the minimum calculation are not the same check. An accounting loss, the tax loss shown in the return and a loss arising from an exemption must not be combined in a single line.
The fields of the tax return form used by the tax administration, and its current explanation, should be recorded according to the date of the transaction. The fact that the program accepts a field does not replace the legal reasoning. A refusal by the program also does not remove all the remedies the law grants. The reservation of rights (ihtirazi kayıt), lawsuit, correction or refund options must be assessed separately according to the nature of the declaration, its time limit and the earlier transactions.
It does not follow that an automatic refund arises for every minimum tax paid in a past period. The legal route for a refund request, its time limits, the relationship between the decision and the relevant period, and the finality of the transaction are reviewed separately. In this way, the actual scope of the annulment is explained without overlooking the procedural problems of the specific file.
How Is the Comparison with the Regular Tax Made?
In a simplified example, assume that the regular corporate tax is 70,000 TL and that, after legal adjustments, the minimum tax is 100,000 TL. As a result of the comparison, 100,000 TL rather than 170,000 TL is taken as the basis. Had the regular tax been 140,000 TL, the minimum amount would not have been added on top of it. The example illustrates a hypothetical situation with no special incentive deductions or offsets.
The law allows certain amounts linked to public offerings (halka arz), export and production rate reductions, and investment incentives granted before a certain date to be deducted from the minimum amount. The date of the investment incentive certificate is therefore important. Afterwards, the provisional tax (geçici vergi) and withholdings already paid are assessed in their own order.
Calculating the Regular and Minimum Corporate Taxes Together
| Item | Regular calculation | Minimum calculation |
|---|---|---|
| Commercial profit and non-deductible expenses (KKEG) | Starting data | Starting data |
| Exemptions and deductions | Under their own provision | Only the permitted scope |
| Prior-year losses | Conditions of KVK Article 9 | Check of the decision and current application |
| Rate and incentives | Relevant rate provisions | 10% and permitted tax deductions |
| Offset | Payment and documentation conditions | Relevant rules after the comparison |
Are the first three years of a new company tax-free in all cases?
No. The provision is an exception for the minimum tax; it does not abolish the regular corporate tax. Moreover, the condition of actually starting operations for the first time must be met.
Is the minimum tax collected on turnover?
This provision is not a 10% tax applied directly to turnover. The earnings and adjustments defined by law are used. In the case of a loss or a low profit, the result is found by examining the accounting and tax differences.
Decisions and Preparation Before Acting
Prepare the regular and minimum corporate tax calculations separately, using data from the same period. For prior-year losses, keep the records that separate commercial loss from tax loss, and keep the full text of the decision. Do not claim a final result before the subsequent legal remedy status of the decision has been verified.