Full and limited liability
The Turkish Corporate Tax Law, KVK (Kurumlar Vergisi Kanunu), splits companies into two regimes. Article 1 sets the taxable object, Article 3 divides taxpayers into full and limited.
A full taxpayer (tam mükellef) is a company whose legal seat (kanuni merkez, the registered address in the charter) or place of effective management (iş merkezi, where decisions are actually made) is in Turkey. It answers to Turkey on worldwide income.
A limited taxpayer (dar mükellef) is a foreign company with neither its legal seat nor its management centre in Turkey. It pays Turkish corporate tax only on Turkish-source income. Everything below concerns only such companies.
The base is computed the same way in both regimes: net corporate profit (safi kurum kazancı) under Article 22 of the KVK, essentially accounting profit with tax adjustments, not a separate system for foreigners.
What income items build the base
For a limited taxpayer, Turkish income falls into six groups:
- business profits from activity in Turkey;
- agricultural income from Turkish land;
- income from personal services performed in Turkey;
- income from Turkish real estate, including rent;
- investment income: dividends, interest, royalties of Turkish source;
- other Turkish-connected gains.
The corporate rate is 25 percent, 30 percent for the financial sector. The key point: every item except business profits is taxed at source through withholding (stopaj), deducted by the Turkish payer at payment. For that, the foreign company needs no presence in Turkey at all. Dividends, interest and royalties are clipped on the way out, and the Turkish story usually ends there.
Business profits
A limited taxpayer has Turkish business profits only if it has a fixed place of business (işyeri) or a dependent agent (daimi temsilci, a person authorised to conclude contracts on its behalf). With neither, there is no business profit and no corporate return.
There is an important carve-out for export purchases. If a foreign company buys goods in Turkey solely for export, the mere storage or inspection of those goods does not create Turkish business profit. The test is simple: was the sale concluded in Turkey, or did the goods leave the country. Buying from a Turkish supplier and shipping abroad creates no Turkish profit.
What is done to the goods matters separately. Packing, sorting and labelling for export service the export. Processing that transforms the goods is manufacturing in Turkey, and that is business profit.
Three working patterns
Export-only warehouse
A foreign company leases a warehouse, buys from Turkish suppliers and ships everything abroad. No domestic sale, no signing agent. No business profit, no return.
Mixed flow with domestic sales
The same warehouse, but part of the goods is sold to Turkish buyers. Domestic sales through a place of business are business profit. Registration, a return and tax on that slice of turnover follow. Mixing the flows without separate accounting is not an option.
A signing agent in Turkey
If a person in Turkey concludes contracts on behalf of the foreign company, that is a daimi temsilci. Even without an office, their authority creates a permanent establishment with full consequences. Powers of attorney are read literally.
Where a double tax treaty exists between Turkey and the company\u0027s home state, its permanent-establishment definition may be narrower than the domestic text. But a treaty works only with a certificate of tax residence, and only where it narrows taxation in the taxpayer\u0027s favour.
Questions
Do we need a branch to buy goods in Turkey for export
No. Buying solely for export creates no business profit. A branch is needed if you sell inside Turkey or transform the goods.
A buyer in Izmir pays us directly, is that Turkish income
If you have no place of business or agent in Turkey and the goods are delivered from abroad, that is not Turkish business profit. If the deal is executed through your warehouse or your signing agent in Turkey, the answer changes.
Is a leased export warehouse a fixed place of business
Not by itself, if it serves only the outbound flow. The test is always the same: what happens to the goods and who buys them.
Are interest and dividends from Turkey also company profit
They are on the list of Turkish-source income, but they are taxed at source through withholding at payment. No return is needed for them unless they arise from an actual establishment in Turkey.
Can flows be split: export untaxed, domestic sales taxed
Yes, but only with separate accounting and clean paperwork. A mixed warehouse without separation will be read by an inspector as domestic activity in full.
Bottom line
Limited-taxpayer status is decided by three facts: what the contract says, who the buyer is, and what was physically done to the goods in Turkey. An export purchase with no domestic sale creates no Turkish profit. This material is informational and is not individual advice.