Türkiye Builds a Hub: New Incentives for Transit Trade and Regional Service Centres

Türkiye Builds a Hub: New Incentives for Transit Trade and  Regional Service Centres

Why this matters now? 

For a decade Türkiye's pitch to internationally active groups rested on market size, manufacturing cost and  the free zone regime. It had no credible answer when a group asked where to book its merchanting margin,  or where to place a shared service or global capability centre; those conversations ended in Dubai, Dublin,  Warsaw or Bucharest. Law No. 7582 is the first serious answer. 

With the general corporate tax rate at 25%, the new reliefs produce an effective rate of roughly 1.25% on  transit trade profit outside the İstanbul Finance Centre and nil inside it. That places Türkiye in the same  conversation as the hub regimes it competes with, while offering a labour market that is deeper and  materially cheaper than most of them. The design is also consistent with post-BEPS reality: the reliefs  attach to income actually earned by a Turkish resident company with people and functions in Türkiye, not to  a registered address. That is a strength when the structure has to be defended, and a constraint when it is  being planned. 

1. Transit trade and offshore trading intermediation 

Article 10/1-(i) of the Corporate Income Tax Law No. 5520 has been recast. What was a 50% deduction  available only to IFC participants is now a general relief. 

Scope 

• Profit from selling goods purchased abroad onward to buyers abroad, without the goods entering  Türkiye; and 

• commission and similar income from intermediating in purchases and sales of goods that take place  abroad. 

Rate and conditions 

The deduction is 95% of qualifying profit, rising to 100% for companies holding a participant certificate in the  İstanbul Finance Centre under Law No. 7412 and for companies in industrial zones under Law No. 4737 that  the President approves by reference to the zone's foreign investment intensity. The President may reduce  the rate to zero or raise it to 100%.

Three conditions apply: the profit must be transferred to Türkiye by the date the annual corporate tax return  is due; in intermediation cases neither the buyer nor the seller may be resident in Türkiye; and the deduction  must be shown separately on the return. 

What the implementing guidance changes in practice 

▪ Physical touch defeats the relief: Communiqué Serial No. 26 works through an example in which  goods bought from a German supplier are moved into a Turkish bonded warehouse and then sold to  a French customer. The sale is to a non-resident, but the goods entered Türkiye, so nothing is  deductible. Groups that consolidate cargo through Turkish warehouses need to weigh the logistics  saving against the tax cost. 

▪ Only trading margin counts: Interest, repo income, foreign exchange gains, gains on the disposal of  participations or fixed assets, and other non-operating items are excluded from the deductible  base. The exchange-gain exclusion matters for a lira-functional entity carrying hard-currency  receivables. 

▪ Records must be segregated: Revenue, cost of sales and operating expense of qualifying and non qualifying activity have to be tracked separately, with a defensible allocation key for shared costs.  This is a system design question, not a year-end adjustment. 

2. Qualified Service Centres 

A new Additional Article 1 of the Foreign Direct Investment Law No. 4875 creates the "qualified service  centre": Türkiye's regional headquarters and global capability centre vehicle. 

Who qualifies 

Three tests apply cumulatively:  

i. the entity is a Turkish capital company (joint stock or limited liability);  

ii. it is established to serve related companies or a group that is actively operating in at least three  different countries; and  

iii. it derives at least 80% of its annual revenue from those foreign related parties. 

In-scope activities 

The statute lists two baskets. The first covers financial advisory, strategic management consultancy, risk  management, treasury and liquidity management, funding and borrowing, investment and capital structure  planning, budgeting, financial reporting and analysis, international accounting and compliance, audit,  digital transformation and technology consultancy, investment and data analysis, legal advisory, promotion,  brand management, human resources and training, together with the coordination and management of  those services. The second covers coordination and management of sales, after-sales and technical  support, research and development, outsourcing, testing of newly developed products and laboratory  services. Advice on domestic activity or on Turkish law must be procured from an advocate or law  partnership under the Attorneys Act No. 1136, a limit worth reading before a group centralises legal work in  İstanbul. 

Corporate tax 

Under the new Article 10/1-(j), 95% of the income a qualified service centre derives from abroad exclusively  within these activities is deductible, rising to 100% for IFC participants and for approved industrial zones.  The relief runs for twenty accounting periods from the period in which the centre commences operations,  subject to the same repatriation condition. Income from anything outside the qualifying activities is  excluded.

Payroll 

Article 23/1-(20) of the Income Tax Law, in force since 4 June 2026, exempts the portion of a qualified service  employee's wage that does not exceed three times the gross minimum wage: five times in the IFC and in  approved industrial zones. On 2026 figures that is approximately TRY 99,090 and TRY 165,150 a month.  Support staff in administrative or indirect roles fall outside the exemption, and an employee splitting time  between qualified and support duties is exempt on a pro rata basis. The exemption cannot be combined  with the IFC wage exemption under Article 6 of Law No. 7412; a centre has to choose. 

3. The minimum tax point: the technical heart of the package 

Turkish reliefs have repeatedly been neutralised in practice by the domestic minimum corporate tax in  Article 32/C, which applies a floor computed before most exemptions and deductions. Law No. 7582  amended Article 32/C to add both the transit trade deduction and the qualified service centre deduction, alongside the IFC financial services export relief, to the items that may be taken into account in that  computation. 

Without this amendment the transit trade relief would have produced an effective rate near the minimum  tax floor rather than 1.25%. It is the single most important feature of the package and the reason the  numbers are real. 

Groups within the scope of the global minimum tax (Pillar 2) should nonetheless model separately.  Reducing Turkish corporate tax to 1.25% or to nil does not by itself create a saving if the group's Turkish  jurisdictional effective rate is then topped up; the substance-based income exclusion and Türkiye's own  domestic top-up tax drive that answer. For groups below the EUR 750 million threshold the benefit is clean. 

4. What to do before the 2026 return 

▪ Map the merchanting flows: Identify where offshore trading margin is currently booked. For many  Turkish-owned groups that is a UAE or Dutch entity; the arithmetic for bringing the function home has  changed. 

▪ Test the physical route of the goods: Any Turkish customs or bonded warehouse touch point  disqualifies the profit, however the sale is invoiced. 

▪ Build the segregation now: Chart of accounts, cost centres and an allocation key for shared costs,  designed before year end rather than reconstructed at filing. 

▪ Treat transfer pricing as the binding constraint: A 95% to 100% deduction shifts the audit question  from whether the relief applies to how large the deductible base is: the arm's length remuneration of  the centre, the cost base it charges on, and evidence that the services were rendered and benefited  the recipients. 

▪ Price the IFC option: A participant certificate is the single mechanism that lifts the deduction to 100%  and the payroll cap to five times the minimum wage. 

▪ Check the other side: A Turkish entity taxed at 1.25% or nil is an obvious controlled foreign company  candidate for shareholders in Germany, France, the Netherlands or the United Kingdom, and  centralised service delivery raises permanent establishment and withholding questions in the  recipient jurisdictions. 

5. Watch list 

▪ Secondary legislation from the Ministry of Industry and Technology on qualified service centre status  and on the qualified/support personnel boundary. It had not been issued as this note went to press, so  status is currently self-assessed against the statutory criteria.

▪ The Presidential Decree designating industrial zones by foreign investment intensity, the gateway to  the 100% rate outside the IFC. 

▪ The President's authority to vary these rates, including downward. 

▪ Adjacent measures in the same law: a 12.5% corporate tax rate on manufacturing and agricultural  production income from 2027; the IFC financial services export relief extended to 2047; a twenty-year  income tax exemption for newly resident individuals; and a voluntary asset declaration open until 31  July 2027. 

In conclusion, it is clear that Türkiye has not simply cut a rate; it has built a location decision. The reliefs turn  on repatriation, real activity and documentation, so the work is structural and best done before the first  return under the new regime is filed. 

_{This note is a general summary of legislation in force at the date shown and is not advice on any specific facts. Positions should be  confirmed against the legislation, the implementing guidance and the group's own circumstances before they are taken.}