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Corporate tax

How Minimum Corporate Tax Changes the Real Value of Incentives

The published rate of a deduction or exemption may differ from the economic benefit retained by the investor because domestic and global minimum tax create separate layers.

12 August 20264 minute read
10%General floor under the domestic minimum corporate tax
3 periodsExclusion period for companies commencing business for the first time
Separate testGlobal layer for multinational groups above the revenue threshold

01

The domestic minimum-tax layer

Under the domestic minimum corporate tax, tax calculated is generally not permitted to fall below 10% of corporate income before exemptions and deductions. Statutory exceptions and excluded items require an activity-specific review.

Companies commencing business for the first time are outside the regime for three accounting periods. Reorganisations such as mergers, transfers, conversions and divisions are not treated as first-time operations merely because of the restructuring.

02

Global minimum tax is a separate analysis

For multinational groups above the relevant consolidated revenue threshold, global minimum top-up taxation must be considered separately. The group-level effect of a Turkish incentive may not be visible from the Turkish company's return alone.

03

Elements to model together

  • Comparison of ordinary corporate tax and domestic minimum tax
  • Ordering of reduced rates, exemptions and other support
  • Whether the first-time-operation exclusion genuinely applies
  • The group's global minimum-tax position and possible top-up tax elsewhere
Measure an incentive by comparing total tax with and without the relief, not by the published percentage alone.

TIBA

Measure the incentive inside the total tax model

TIBA coordinates the relevant tax specialists to bring incentives, minimum taxation and group structure into one decision model.

Discuss the tax model

Official sources

Domestic Minimum Corporate Tax GuideCorporate Tax General Communiqué No. 26

This publication is for general information only and is not legal, tax, financial or investment advice. Current law and the specific facts should be reviewed by appropriately qualified professionals before any transaction.