A service export tax exemption in Turkey keeps the profit a company earns from foreign clients out of the corporate tax base; the headline rate and the effective rate are rarely the same number.

That gap is the reason this page exists. On 24 April 2026, President Erdoğan announced a package, detailed three days later by Treasury and Finance Minister Mehmet Şimşek, that lifts the existing 80% deduction on qualifying service exports to 100%. Software, video games, health tourism, education, engineering, design and architecture sit inside the stated scope. The figure is real. What that same figure means on the last line of a tax return depends on three technical questions still unanswered in the draft law.

A founder looking at Turkey from Berlin, Amsterdam, London or Austin sees a 100% headline and reads it as zero. A tax lawyer reads the same announcement and sees a structure: the residence of the client, the place where the service is used, and one line in the articles of association that decides whether any of it holds. Both are looking at the same regime. They are not seeing the same thing.

This is not a promise built from nothing. The regime began in 2012 at 50% and climbed in a straight line. At every step the rate rose, and at every step the ground beneath it matured: rulings accumulated, case law settled, certified-accountant discipline took hold. The move to 100% rests on fourteen years of that sediment. Turkey’s services trade ran a surplus of roughly 60 billion dollars in 2025, and the protectionist wave reshaping global goods trade leaves services largely untouched. The package choosing service exports is not an accident.

Founders selling software and professional services to clients abroad increasingly ask the same question: how much of an advantage is it, really, to base the company in Turkey and claim this exemption?

⚖️ What the 100% Service Export Tax Exemption Actually Means

The service export tax exemption allows the entire profit earned from selected services sold to non-resident clients to be deducted from corporate income. The mechanism in Article 10/1-(ğ) of Corporate Tax Law No. 5520 is not being replaced. Only the rate moves, from 80% to 100%.

In practice it looks like this. A limited company in Istanbul that develops software for a client resident in Germany pays no corporate tax on the profit from that work. Under Articles 11/1-a and 12/2 of VAT Law No. 3065 there is no VAT on the sale either, and the input VAT incurred while producing the service can be refunded. When the two exemptions combine, the effective tax burden on service export profit moves, in theory, close to zero.

The simplicity of the number is misleading. A 100% exemption means the profit is calculated as a deductible amount; it does not mean the company writes a check for nothing. The Domestic Minimum Corporate Tax base in Article 32/C, in force since 2025, does not let that deduction run all the way down. At the current 80% rate this limit was already visible: the Article 10/1-(ğ) deduction is excluded from the minimum-tax calculation, and the effective burden is pulled back up. Whether the new law revises the minimum-tax treatment is one of the most consequential open questions on this page, and the single line to watch when the draft reaches Parliament.

The structure that makes this tax profile real is never built by one provision. The service export exemption is the corporate leg of the Türkiye Century package announced on 24 April 2026; used alongside the package’s other component, the 20-year tax exemption for individuals relocating to Turkey, it produces an advantage at the personal and corporate level at the same time. How that structure is assembled at the formation stage is set out on the company formation page.

 

⚖️ A New Regime, or the Final Step of an Existing One?

The 100% exemption is not a regime built from scratch. It is the closing point of a fourteen-year climb that began in 2012. That distinction sets the tone of the whole page: it should be read not as a fresh promise, but as the last stage of a teaching that has already matured.

The evolution runs as follows.

Date	Regulation	Deduction Rate
15 June 2012	Law 6322, first version of CTL Art. 10/1-(ğ)	50%
2016	Law 6728, scope widened	50%
1 January 2017	Income Tax Law 193 Art. 33, same framework for sole proprietorships	50%
1 January 2023	Law 7491 raises the rate	80%
28 July 2024	Law 7524, 5-point corporate tax reduction on exports (CTL Art. 32/7)	80% + 5 points
2025	CTL Art. 32/C, Domestic Minimum Corporate Tax enters force	10% floor effect
24 April 2026	Türkiye Century package announced, to be legislated	100%

This evolution shows legislation and practice growing together. Since 2012 the Revenue Administration has issued dozens of rulings that drew the boundaries of the deduction. Design consultancy was placed outside scope (ruling no. 107854 of 22 May 2023). Digital advertising management was held outside scope (ruling no. 67858 of 11 August 2020). Education provided to the children of embassy staff resident in Turkey was excluded (Ankara Tax Office ruling no. 51911 of 14 November 2023). That accumulated body of interpretation has already answered most of the questions a move to 100% might otherwise reopen.

The only concrete change the new regime brings is the rate, up by 20 points. The principal-activity condition, the non-resident-client condition, the used-abroad condition, the repatriation condition and the invoicing rules all continue unchanged. Minister Şimşek’s 27 April statement referred to “software, video games, health tourism, education, engineering, design, architecture and similar high value-added service exports”; how that phrase “and similar” is defined in the enacted text will decide whether the scope genuinely widens or simply restates what is already covered.

⚖️ Which Services Qualify, and Which Quietly Do Not

The services covered by CTL Art. 10/1-(ğ) form a closed list set out by enumeration. A service that falls outside it does not qualify, no matter how high its value added.

Services currently within scope:

• Software services: software development, SaaS, mobile applications, web platforms and video-game development all fall here. Minister Şimşek singled out video games in the 27 April statement, although they are already part of the software category as a matter of law.
• Engineering: design, calculation and application work in civil, mechanical, electrical-electronic and industrial engineering produced for projects abroad.
• Architecture: architectural design, landscape architecture and interior architecture.
• Design: industrial design, product design and graphic design. Design consultancy was placed outside scope by ruling; only the design work itself qualifies.
• Medical reporting: clinical research reports, diagnostic reports and second-opinion reports (ruling no. 885 of 21 August 2013).
• Bookkeeping: ledger keeping and financial reporting for non-resident companies.
• Call centres: call handling and customer service directed at clients abroad.
• Data storage, product testing, certification, data processing and data analysis: added to scope by Law 6728 in 2016.
• Education and healthcare activity: services provided under ministry licence and supervision. The “health tourism” framing in the announcement is broader, but the enacted definition appears likely to keep the licensing regime intact.

Services outside scope, which create the most common misunderstandings:

• Pure consultancy: management, strategy and commercial consultancy are not on the Art. 10/1-(ğ) list. Invoicing dressed up as “software consultancy” can be rejected at audit.
• Design consultancy: not the design itself but advice about it, treated as pure consultancy, therefore excluded.
• Digital advertising management: outside scope because it is not on the list.
• Services provided from outside Turkey: Art. 10/1-(ğ) requires the service to be supplied from Turkey. A service delivered from an office abroad is excluded, not because the client is foreign, but because the work physically leaves from outside Turkey (ruling no. 114489 of 6 October 2020).
• Services to clients in free zones: free zones are not treated as abroad for tax purposes.
• In-game advertising revenue: advertising income is not software income, so it falls outside the exemption.
• Assembly and installation: not on the list.

Which service types fall squarely inside this exemption, and which carry risk the moment a tax inspector reads the invoice?

⚖️ Conditions and Documentation

The conditions for the exemption continue from the current regime unless the enacted text changes them. Missing any one of them costs the deduction, and that is the usual starting point of a tax dispute.

The conditions are these.

1. The client must be resident abroad. Services to persons or entities with a residence, legal seat or place of business in Turkey are excluded. Invoicing a Turkish representative office also voids the exemption.
2. The service must be used abroad. Even if the work is supplied from Turkey, the benefit must arise abroad. An architectural project for real estate located in Turkey is excluded even when ordered by a non-resident client, because the benefit is in Turkey.
3. The principal activity must appear in the company’s articles of association. This is where the page becomes a legal matter rather than a tax matter. If a company earning software export income does not have “software development” in its articles, the deduction cannot be applied. A mistake made at registration surfaces years later, in an audit.
4. The invoice must be issued to the non-resident client. Not to a representative office or an intermediary in Turkey, but directly to the client abroad.
5. The earnings must be transferred to Turkey within the filing period. Foreign currency or Turkish lira makes no difference; ruling no. 166967 of 3 February 2023 confirms it.
6. Documentation must be complete. Contract, invoice, bank receipts, customs exit documents where relevant, and a certificate of foreign residence where required. The certified public accountant (YMM) report is the assurance layer on top of the deduction.

⚖️ The Minimum Corporate Tax Interaction

This is the most technical point on the page and, unless the enacted text changes it, the structural limit on what the 100% rate is actually worth.

Article 32/C, in force since 2025, ensures that the tax a company pays does not fall below a minimum floor. Certain deductions are ignored in the minimum-tax calculation. The Art. 10/1-(ğ) service export deduction is among those ignored; only paragraphs (g) and (h) were preserved.

The practical result is this. A software company that earns all of its income from software services sold to clients abroad, and applies the 100% deduction in full, can still see its effective burden pulled back up once the Article 32/C minimum-tax base engages. At 80% this was seen in real returns in 2025. The move to 100% preserves the gap between theoretical advantage and practical advantage, unless the enacted text revises the minimum-tax treatment.

Three questions need watching through the legislative process.

• Will the 100% deduction be allowed in the Article 32/C minimum-tax calculation?
• How will the 5-point export reduction (Art. 32/7) interact with the 100% exemption? Applied to the same profit, the two reliefs collide mathematically.
• Will the transition provision cover 2025 income, or only income earned from 2026 onward?

Until the draft is sent to Parliament, the answers stay open. Any tax planning done before then is best built on a model that runs both scenarios, and specific tax simulations are verified with our tax counsel before a structuring decision is fixed.

Founders planning a technology company ask it directly: with the minimum corporate tax running, what is the real effective value of the 100% exemption?

⚖️ VAT and Stacking with Other Incentives

Service export is not only a corporate tax advantage; it carries a VAT advantage as well. Under Articles 11/1-a and 12/2 of VAT Law No. 3065, services provided to non-resident clients and used abroad are VAT-exempt. The input VAT incurred in producing the service can also be refunded, which turns input VAT into cash. The mechanics are set out on the VAT exemption page.

The package does not change the VAT regime, but when the two exemptions combine the total advantage stacks. In R&D-heavy fields such as software and games, a third and fourth layer of incentive can also engage.

Incentive	Legal Basis	Effect
Service export 100% exemption	CTL Art. 10/1-(ğ), pending	Corporate tax near zero (minimum-tax reserved)
VAT exemption and refund	VAT Law Art. 11/1-a, 12/2	No VAT on sale, input VAT refundable
R&D centre status	Law 5746	80% to 95% payroll withholding exemption
Technopark activity	Law 4691	Corporate tax exemption on in-zone income, payroll withholding exemption
Investment Incentive Certificate	Decree 2012/3305	VAT and customs exemption and employer SSI premium support for data-centre investment
20-year tax exemption regime	Türkiye Century package, pending	Foreign-source personal income tax-free for 20 years

Combining the layers is the strongest argument tying this page to the personal side. A founder who relocates to Turkey can first enter the 20-year regime and keep foreign-source personal income tax-free, then form a Turkish software company and export services to clients abroad, claiming the 100% corporate exemption on that profit. The two structures, used at the personal and corporate level at once, produce a tax profile that is rare in the current competitive landscape. Where these reliefs sit within the wider programme is mapped on the Türkiye Century Investment Program page, alongside the regional headquarters and manufacturing incentive tracks.

⚖️ Who Benefits, and Who Does Not

The target group should be read in concrete business profiles, not only in the statute’s sector list. The “high value-added service exports” framing in the announcement speaks to the segments below.

Picture two founders. The first is a software engineer earning 150,000 euros a year in the Netherlands, who forms a company in Turkey and invoices from there. At the corporate level the 100% exemption applies; at the personal level the 20-year regime applies. The second has the same profile and the same client portfolio, but the articles of association read “technical consultancy” rather than “software development.” Five years on, in an audit, the second loses the deduction and the first keeps it. The difference does not begin in the tax return. It begins in the legal structure.

• Founders and game studios serving clients abroad: professionals delivering freelance or corporate software services into high-tax markets such as Germany, the Netherlands, the United Kingdom and the United States. Forming a Turkish limited or joint-stock company and moving the client portfolio onto a Turkey-based entity brings the corporate profit within the 100% exemption.
• SaaS companies: businesses selling subscription software to clients abroad. Where the portfolio is entirely non-resident, corporate income can fall directly within scope.
• Health tourism investors: clinics, hospitals and treatment centres serving foreign patients, qualifying so long as the ministry licensing and supervision condition is met.
• Engineering and architecture firms: offices producing design, calculation and project work from Turkey for projects abroad.
• Data, AI and data-processing companies serving foreign clients: the list took in these fields in 2016, and the practice is settled.
• Licensed education providers: institutions teaching foreign students remotely or in Turkey, subject to ministry licensing.

Who falls outside is equally worth stating. Pure consultancy firms, in management, strategy or design advisory, do not qualify. Structures that open an office abroad and supply from there fail the supplied-from-Turkey condition. Advertising agencies cannot rely on the exemption because digital advertising management sits off the list.

⚖️ Legal Process and Tax Audit Risk

Whatever the rate, the exemption demands attention on several legal layers at once. A mistake at formation surfaces five years later in an audit, and at that point the tax-loss penalty, late-payment interest, clawback of the VAT refund and a long tax litigation begin together.

The concrete reasons this page calls for legal advice:

• Choice of structure: limited or joint-stock company; single-shareholder or with a foreign partner; under a holding or not. Beyond the tax profile, connected processes such as citizenship through employment, an R&D centre application or a technopark application all bear on the decision.
• Drafting the articles of association: if the principal activity is not defined correctly the exemption is disabled. The case law on this point is unambiguous.
• Contract structuring: the contract with the foreign client must be written to prove the used-abroad condition. Vague wording invites rejection at audit.
• Invoicing and documentation: invoices to the non-resident client, evidence of repatriation and bank receipts must be kept complete.
• CPA certification: the certified public accountant report discipline continues for claiming the deduction.
• Double taxation treaties: in structures with a foreign partner or investor, Turkey’s treaty network governs how profit is distributed. A double taxation analysis belongs before company formation, not after.
• Employment: hiring foreign specialists, digital nomad permits and share-option plans come up often for software and game companies.
• Data protection compliance: in software and SaaS, KVKK, GDPR and US data laws are frameworks to manage at the same time. The relevant work sits within information technology law.

A structure that holds is built by reading these layers on one plane, from company formation through the employment structure, share split, dividend policy and treaty strategy, rather than one decision at a time.

⚖️ Legislative Status and Open Questions

As of 24 April 2026 the package was announced at presidential level. It has not yet been sent to Parliament as draft legislation. A reader of this page needs to hold that distinction clearly: between a statement of intent and entry into force lie the transition provisions, the scope definition and the technical detail, none of which is settled.

The announced timeline:

• 24 April 2026: President Erdoğan announced the package within the “Türkiye Century, Strong Centre for Investment Programme.”
• 27 April 2026: Treasury and Finance Minister Mehmet Şimşek set out the detail at a meeting chaired by Vice President Cevdet Yılmaz.
• Expected stage: a bill is sent to Parliament, debated in committee and adopted in the General Assembly.
• Entry into force: on publication in the Official Gazette after enactment; the tax period the transition provisions cover will be fixed in the text.

Open questions to follow:

1. Will the 100% deduction be taken into account in the Domestic Minimum Corporate Tax (Art. 32/C) calculation?
2. How will the “and similar” phrasing be defined? Will fields outside the current list, such as pure consultancy, digital advertising management or AI and ML services, be brought in?
3. Will the interaction between the 5-point export reduction (Art. 32/7) and the 100% exemption be clarified in the text?
4. Will the transition provision cover 2025 income or only income from 2026 onward?
5. How will the health tourism definition separate from the existing “activity in the field of healthcare” wording, and will the ministry licensing condition continue?
6. How will CPA certification discipline apply at the 100% rate?

The answers to these will decide the practical meaning of the “100%” figure. Until enactment, planning is best built on a dual-scenario model, and every legal position is verified with our tax counsel before it is finalised. The official text and developments can be followed through the Legislation Information System.

⚖️ Where This Sits in the Türkiye Century Package

The 100% service export exemption should be read as one leg of the 24 April 2026 package rather than a standalone measure. Its companion leg, for individuals, is the 20-year tax exemption. Together they change the tax profile Turkey offers the globally mobile founder and technology entrepreneur.

The structural logic is this. The 20-year exemption regime keeps foreign-source income tax-free at the personal level for two decades; the service export exemption takes profit earned from foreign clients out of the corporate tax base. One works on the person, the other on the company, and they complete each other.

A typical path for a relocating founder runs as follows. The individual enters the 20-year regime and shields foreign-source personal income. The founder then forms a Turkish software company and exports services to clients abroad, claiming the 100% corporate exemption on that profit. Viewed separately, neither leg is unusual; combined, they produce a global tax position that is easy to miss. For founders with prior Turkish ties, a third measure in the same package, the 2026 asset-amnesty regime, can register existing offshore holdings at a low rate, but that piece matters mainly where there are pre-existing assets to declare.

Which structure lets a founder relocating to Turkey use both the personal and the corporate advantage at the same time?

❓ Frequently Asked Questions

✅ When will the 100% service export tax exemption take effect?

As of 24 April 2026 the 100% service export tax exemption is at the statement-of-intent stage. It takes effect after enactment in Parliament and publication in the Official Gazette. The legislative timetable has not been announced, and the tax period the transition provisions cover will be fixed in the text of the law.

✅ What is the difference between the current 80% deduction and the new 100% exemption?

The core difference is a 20-point increase in the rate. The other conditions, non-resident client, use of the service abroad, principal activity in the articles, invoicing and repatriation, continue from the current regime. Unless the enacted text changes the minimum corporate tax treatment, the practical value of the 100% figure may again be capped.

✅ Do I have to set up a company in Turkey to use this exemption?

Yes. Article 10/1-(ğ) is a deduction for companies that are full taxpayers in Turkey. A company established abroad cannot claim it directly; only service sales made through a subsidiary or branch formed in Turkey fall within scope.

✅ I provide pure management consultancy. Does it qualify?

No. Pure consultancy is not on the Art. 10/1-(ğ) list, so it is outside scope. Design consultancy, management, strategy and commercial consultancy can be rejected at audit; labelling work as “software consultancy” provides no legal protection.

✅ Does a service I deliver from outside Turkey to a foreign client qualify?

No. Article 10/1-(ğ) requires the service to be supplied from Turkey. Ruling no. 114489 of 6 October 2020 confirms that a service supplied from an office abroad is outside scope solely because the client is non-resident. The service must physically be supplied from Turkey.

✅ Can I keep the service export earnings abroad?

No. One of the conditions is that the earnings are transferred to Turkey within the filing period. Foreign currency or Turkish lira makes no difference (ruling no. 166967 of 3 February 2023). While the earnings stay in an offshore account, the exemption cannot be applied.

✅ Does a service to a client in a free zone count as an export?

No. Free zones are not treated as abroad for tax purposes. Services to companies established in a free zone fall outside Art. 10/1-(ğ). This is a point taxpayers frequently get wrong.

✅ Is in-game advertising revenue covered?

No. In-game advertising revenue is not treated as software income, so it is outside scope. Profit from software and game development services qualifies; income from serving advertising does not.

✅ Can the 5-point export reduction be applied together with the 100% exemption?

The practical answer depends on the enacted text. At the current 80% rate, the 5-point corporate tax reduction (Art. 32/7) applies to the portion remaining after the 80% deduction. At 100% the two reliefs collide mathematically when applied to the same profit, and the law is expected to clarify the point.

✅ As a foreigner relocating to Turkey, which advantages can I combine?

The 20-year tax exemption (foreign-source personal income tax-free for 20 years) and the 100% service export exemption (zero corporate tax on services sold abroad through a Turkey-based company) form a two-layer structure. For those with prior Turkish ties, the 2026 asset-amnesty regime adds a third layer for declaring existing offshore holdings. Used together, the personal and corporate advantage apply at once, calibrated to each person’s situation through legal planning.

✅ What happens if some of my clients are in Turkey and others abroad?

The exemption applies only to the profit from services sold to non-resident clients and used abroad. Income from domestic clients is taxed normally. The company must separate the two streams in its accounts and deduct only the qualifying portion. Poorly segregated mixed income is itself a frequent audit trigger.

✅ What is the difference between the VAT exemption and the corporate tax exemption on service exports?

They are two separate reliefs under two laws. The VAT exemption (VAT Law Art. 11/1-a and 12/2) removes VAT on the sale and lets input VAT be refunded. The corporate tax exemption (CTL Art. 10/1-(ğ)) deducts the profit from the corporate tax base. A service can qualify for one and not the other, so they are assessed independently.

✅ Can a branch or liaison office claim the exemption?

A branch of a foreign company that is a taxpayer in Turkey and supplies qualifying services from Turkey can fall within scope. A liaison (representative) office cannot, because it is barred from commercial activity and produces no taxable income to deduct.

✅ What are the most common mistakes that cause a company to lose the exemption?

The recurring ones are: a principal activity not written into the articles of association, invoicing a Turkish intermediary rather than the non-resident client, failing to repatriate earnings within the filing period, contract wording that does not prove the service was used abroad, and incomplete documentation. Each surfaces at audit, years after the mistake.

✅ How does the Turkish tax authority audit service export claims?

The Revenue Administration checks whether the client is genuinely non-resident, whether the service was used abroad, whether the principal activity matches the articles of association, and whether earnings were repatriated on time. Contracts, invoices, bank receipts and the certified public accountant report are examined together. The deduction is disallowed where any single condition is unproven.

✅ Can a Turkish subsidiary provide services to its foreign parent company and claim the exemption?

Yes in principle, provided the parent is resident abroad, the service is used abroad and the other conditions are met. Related-party transactions carry an extra layer: the pricing must meet transfer pricing rules at arm’s length, or the deduction is exposed at audit. Intra-group service exports are scrutinised more closely than third-party ones.

✅ Can a regional headquarters in Turkey use the service export incentive?

A regional headquarters that supplies qualifying services to non-resident group entities can combine the two regimes, but they are distinct. The regional headquarters regime carries its own conditions, and the service export deduction applies only to the qualifying service income.

✅ Is Turkey a tax-efficient jurisdiction for international service businesses?

For a company selling qualifying services to clients abroad, Turkey’s combined service export and VAT reliefs can bring the effective burden close to zero, subject to the minimum corporate tax floor. Whether it is the right base depends on the client mix, the founder’s personal tax position and treaty coverage, which is why the structure is assessed case by case rather than by headline rate alone.

The question of what the history teaches resolves, at the end of the page, into this: fourteen years of staged increase matured the ground on which practice stands. The 100% figure sits on that ground. But building the structure correctly is a different task from knowing the figure; it starts in the articles of association, continues in the shape of the contract, and is secured by certified-accountant discipline. The enacted text is worth following. Deferring the structuring decisions until it lands, however, means missing the most valuable slice of the opportunity.