The income tax exemption for business income determined under the simplified regime does not mean that this status is unconditional or permanent. The general conditions, the annual business volume and the activities excluded from the simplified regime are checked together. Because the rules for certain activities in metropolitan municipalities changed in 2026, applying the statements on the former Decision No. 95/6430 word for word may be wrong. [1]
Legal Nature of the Practice and How It Differs from Other Obligations
The simplified regime does not exempt a business from all tax and document obligations. The income tax exemption, the document system and the obligations arising from being an employer or a tenant are assessed separately.
Effect of the Simplified-Regime Earnings Exemption on the Income Tax Return
Under Article 20/A (repeated) of the Income Tax Law No. 193 (Gelir Vergisi Kanunu, GVK), business income determined under the simplified regime is not included in the annual income tax return. A person who files a return because of rental or other income does not need to add this income separately. The absence of provisional tax and, in general, value added tax (VAT) return obligations is also among the advantages of this regime.
On the other hand, the duties to issue and receive documents, and to record, report, retain and present records through the Ledger Declaration System (Defter Beyan Sistemi), continue. Social security reporting for employees also continues; the absence of tax withholding does not mean that no premium declaration will be made for the employee. A business that does not incur a tax debt is different from a business with no administrative obligations.
General Conditions and 2026 Business Volume
The essential requirement is that the person actually works in, or is present at, their own business. Using auxiliary workers or apprentices, and mandatory temporary absences, do not break this requirement under the conditions set out in the law. Where the business continues after death on behalf of a surviving spouse or minor children, a special provision applies. Whether the person is subject to income tax under the regular regime for commercial, agricultural or professional activity is assessed separately.
| Check | 2026 amount |
|---|---|
| Annual business premises rent or comparable market rent in a metropolitan municipality | 99,000 Turkish lira (TL) |
| Annual business premises rent or comparable market rent elsewhere | 60,000 TL |
| Annual limit for purchases of goods | 1,200,000 TL |
| Annual limit for sales of goods | 1,900,000 TL |
| Annual gross business receipts from services | 600,000 TL |
| Total where goods are sold and services are provided together | 1,200,000 TL |
The purpose of the check against the 2026 thresholds must be kept separate from the check of business volume realised in 2025. Comparing a past year's business volume retrospectively with limits that were raised in a later year is not correct in every case. For goods with low profit margins, such as precious paper (değerli kâğıt), sugar, tea, lottery tickets, tobacco and fuel, separate purchase and sale thresholds also apply; the general table alone is not sufficient.
Where partners run the same business jointly, the business volume and rent measures are considered across the partnership as a whole. One partner being subject to the regular regime may affect the others. Dividing a business on paper among family members does not give separate limits to what is in fact a single organization.
Transfer of Certain Activities in Metropolitan Municipalities to the Regular Regime in 2026
Presidential Decision No. 10380, and Decision No. 10679 which amended it, moved certain activities within metropolitan municipality boundaries (büyükşehir belediyesi) to the regular regime with effect from January 1, 2026. For commodity manufacturing and trading, construction-related work, motor vehicle maintenance and repair, restaurants and similar establishments, entertainment and recreation venues, and urban passenger transport, the activity definition in the decision is examined. The special scope wording on retail sales made through mobile sales or market stalls should not be overlooked.
There is an exception for districts (ilçe) with a population of 30,000 or less. In addition, for the relevant activities other than urban passenger transport, a separate exception is provided for places that were formerly towns (belde) or villages and have since become neighbourhoods (mahalle), with a population of 2,000 or less. These two population measures cannot be used interchangeably: one concerns a district, the other a neighbourhood with a particular former status.
A small population at an address is not sufficient on its own. Official population data, the neighbourhood's previous administrative status and the actual activity should be documented together. Income Tax Circular No. 100 (Gelir Vergisi Sirküleri 100) is the principal current source for applying this distinction. It is not correct to treat the example cities in the earlier guide as automatically exempt for 2026.
Activities Outside the Scope Despite Low Business Volume
For the activities listed in Article 51 of the Income Tax Law and for work moved to the regular regime by decisions in force, low turnover alone does not confer a right to the simplified regime. Jewellery, certain intermediary and advertising services, real estate and ship purchases and sales, certain construction contracts, mining operations and the transport activities listed in the law are examined separately.
The special decisions described in the earlier guide on wholesale trade in agricultural products and on the purchase and sale of certain electrically operated goods are also part of the activity classification. A computer sales business cannot be assumed to remain in the simplified regime merely because it is a small shop with low receipts. The tradesperson exemption (esnaf muaflığı) is a different regime with its own conditions.
When Does the Transfer to the Regular Regime Take Effect?
As a rule, a breach of the general or specific thresholds during the year leads to a transfer to the regular regime at the start of the following calendar year. Starting an activity excluded from the simplified regime, an optional transfer, and findings relating to forged or misleading documents each have different starting rules. It is not correct to defer every breach automatically to the following January.
In an optional transfer, the date and conditions stated in the petition are taken into account. To return from the regular regime to the simplified regime, in addition to the general conditions, the business volume for the two consecutive preceding years and the application period in January are checked. Where the person carries on an activity that is mandatorily subject to the regular regime, two years of low receipts are not sufficient. The two-year waiting rule on abandoning the business or transferring it to a spouse or children is also assessed separately.
Document, Rent and Employee Obligations
Under the simplified regime, record-keeping and the retention of purchase documents continue. The provision extending, until December 31, 2026, the end-of-day consolidated document practice for eligible receipts on which no document is issued during the day does not create a right to refuse to issue a document where a customer requests one. The status-specific rules for electronic documents in 2026 also apply separately.
The fact that a simplified-regime taxpayer (mükellef) does not withhold income tax on business premises rent does not remove the requirement to document the collection and payment of rent through a bank or Turkish Post (PTT). The former "other wages" regime for employee pay was abolished as of 2022. The minimum wage exemption and, where necessary, the employee's annual return are assessed under current rules.
Effect of the Transition on Value Added Tax and the Young Entrepreneur Earnings Exemption
Supplies and services under the simplified regime are generally exempt from VAT. Nevertheless, showing VAT separately on an invoice, or using "VAT inclusive" wording, may give rise to an obligation to declare and pay the tax shown. Optional VAT registration has its own minimum period and conditions for exit.
Because simplified-regime income is already fully exempt, the young entrepreneur earnings deduction is not applied to the same income. On transfer to the regular regime, the young entrepreneur conditions may be examined under the relevant provision and the transfer date. The one-year premium support described in the earlier guide is not current for 2026: the relevant support under Law No. 5510 was abolished with effect from January 1, 2026.
The transition file should be prepared together with inventory, earlier documents, the ledger system, e-documents, the electronic cash register (ödeme kaydedici cihaz), VAT and the declaration calendar. Leaving the simplified regime is not merely a change of the status entry at the tax office; it also requires daily sales and document arrangements to be brought into line with the new regime.
Decision to Make Before Acting and the File to Prepare
Alongside the business volume limits, check the type of activity and the status of the place where the business is located. If a transfer date to the regular regime is determined, complete the preparations for inventory, books, documents and value added tax by that date; do not assume that the business remains in the simplified regime solely on the basis of low turnover.
Sources and legal bases
- Guide to the Income Tax Exemption for Taxpayers Whose Business Income Is Determined under the Simplified Regime (Kazançları Basit Usulde Tespit Edilen Mükelleflerde Gelir Vergisi İstisnası Rehberi)
- Income Tax Law No. 193
- Tax Procedure Law No. 213
- 2026 Simplified Regime Thresholds (2026 basit usul hadleri)
- Income Tax Circular No. 100: Simplified Regime in Metropolitan Municipalities (Gelir Vergisi Sirküleri 100: büyükşehirlerde basit usul)
- Law No. 7566