New incentive for going public: company tax cuts

The latest development

The Law on Restructuring of Certain Claims and Amendments to Certain Laws No. 7256, published in Official Gazette No. 31307 on November 17, 2020, introduced several changes to tax legislation. Please note our legal information on these changes Here.

One of these changes is particularly important for the Turkish capital markets. The amendment ("modification“) According to Article 32 of the Corporate Income Tax Law No. 5520, tax cuts are provided for companies that go public on the Borsa Istanbul Stock Exchange.

What does the amendment say?

According to the change, the corporate tax rate applied to the corporate income of companies going public on the Borsa Istanbul Stock Exchange will be applied with a discount of two (2) points (instead of the standard rate of 20%) from five accounting periods the first accounting period in which the offer was made, provided that the shares are offered that make up at least 20% of the total share capital of the issuer.

In the event that the above-mentioned free float requirement cannot be met during the five-year period, the taxes not incurred due to the interest deduction will be levied together with the applicable default interest, but without the tax loss penalty.

The tax reduction does not apply to banks, leasing companies, factoring companies, financing companies, payment and e-money institutions, approved foreign exchange institutions, asset management companies, capital market institutions, insurance and reinsurance companies and pension companies.


The change aims to incentivize initial public offerings by offering a significant tax expense benefit to companies considering offering their shares publicly.