As of October 2026, a manufacturer in a Turkish free zone pays no corporate tax on profit from selling the products it makes there abroad, within its own zone or to another free zone; Law 7577 added the last two from 1 January 2026. Profit on sales into the rest of Türkiye is not exempt (the general corporate tax rate is 25%), and those goods enter Türkiye as imports, with import VAT and any customs duty due. Trading companies licensed since 6 February 2004 have no corporate tax exemption.
Türkiye has 19 free zones in operation, from Mersin and İzmir to Istanbul, Kayseri and Trabzon (Ministry of Trade list, 29 September 2026), all under the Free Zones Law No. 3218. Some Chinese-language guides say that income from any activity in a zone is free of all taxes. Turkish law is narrower.
At a glance
| Topic | Rule as of October 2026 | Source |
|---|---|---|
| Who may operate | Turkish or foreign persons with an operating licence from the Ministry of Trade | Law 3218, Art. 5; Ministry of Trade |
| Manufacturer’s corporate tax | Exempt on own products sold abroad, within the zone or to other zones; sales into Türkiye taxed | Law 3218, Prov. Art. 3(2)(a) |
| Trader’s corporate tax | No exemption on trading profit for licences issued since 6 February 2004 | Ministry of Trade |
| Wage income tax | Cancelled if at least 85% of the FOB value of products made in the zone is exported | Prov. Art. 3(2)(b) |
| Social security | Turkish rules apply; premiums are paid | Art. 10 |
| Stamp duty and fees | Exempt for transactions and documents of zone activities | Prov. Art. 3(2)(c) |
| Goods sold into Türkiye | Released for free circulation: import VAT, any customs duty, 0.9% FOB fee for production licensees | Ministry of Trade; Customs Law, Art. 74; Law 3218, Art. 7 |
| Dividends to owners | Withholding tax still applies (15% domestic rate) | Prov. Art. 3(2)(a); Decision 9286 |
| Duration | Until the end of the tax year in which Türkiye becomes a full EU member | Prov. Art. 3(2) |
What did Law 7577 change for free-zone manufacturers?
The rule has moved twice in two years:
- Profits up to 2024: profit from selling products made in the zone was exempt wherever the buyer was.
- 2025: Law 7524 (Official Gazette, 2 August 2024, article 24) limited the exemption to sales abroad, for profits from 1 January 2025.
- From 2026: Law 7577 (Official Gazette, 17 April 2026, No. 33227, article 4) added sales within the zone and to other free zones, for profits from 1 January 2026 (article 14(c)).
The Revenue Administration explained the change in Corporate Tax General Communiqué Serial No. 26 (Official Gazette, 4 July 2026, No. 33300) with this 2026 example:
| A free-zone manufacturer’s profit from sales | Amount | Treatment |
|---|---|---|
| Into Türkiye | TRY 4,000,000 | Taxable |
| Within the same zone | TRY 3,000,000 | Exempt |
| To another free zone | TRY 500,000 | Exempt |
| Abroad | TRY 6,000,000 | Exempt |
The communiqué makes the same change for exempt contract manufacturing (fason). Only products made in the zone under a production licence qualify. A separate exemption covers maintenance, repair, assembly, disassembly, handling, sorting, packaging, labelling, testing and storage services, if the whole service is for non-residents and the goods leave for another country without entering Türkiye.
Users that already held a licence on 6 February 2004 keep an older, wider exemption until the licence term stated at that date ends (Law 3218, prov. art. 3(1)(a)). A new investor gets the rules above.
Can a free-zone company sell in Türkiye?
Yes. According to the Ministry of Trade, only consumer goods and “risky goods” face restrictions on sale from a zone into Türkiye. But a domestic sale works like an import:
- Trade between a zone and the rest of Türkiye falls under the foreign trade regime (Law 3218, art. 8), and goods sent from a zone into Türkiye are released for free circulation.
- Release for free circulation requires trade policy measures to be applied, import formalities to be completed and the taxes due to be collected (Customs Law, art. 74). Third-country goods not in free circulation pay customs duty at the Common Customs Tariff rate (Ministry of Trade), and imports of goods are subject to VAT (VAT Law, art. 1).
- A user with a production licence pays a fee of 0.9% of the FOB value on goods sent from the zone into Türkiye, and 0.1% of the CIF value on goods it brings in from abroad, with exceptions such as goods used in the investment and installation phase (Law 3218, art. 7).
- The profit on these sales is not exempt; it is taxed under the normal corporate tax rules (general rate 25%).
Structure matters too. A company headquartered in a zone cannot trade or open a branch elsewhere in Türkiye under the same trade name; a company based in Türkiye must operate in a zone through a branch (Ministry of Trade). Settle this before formation; see choosing the right company structure in Türkiye.
What does a trader or warehouse operator get?
No corporate tax exemption on trading profit: according to the Ministry of Trade, licences issued since 6 February 2004 for activities other than production carry none. The exception is the service exemption above, for storage, handling and the other listed services provided wholly to non-residents (Law 3218, prov. art. 3(2)(a)). What remains for everyone:
- Goods from abroad enter the zone without customs duty and can stay there without a time limit (Customs Law, art. 156).
- Purchases from Türkiye are free of VAT, because a delivery to a buyer in a free zone counts as an export (VAT Law, arts. 11 and 12). Services provided in free zones are also exempt from VAT (art. 17(4)(ı)).
- Transactions and documents relating to zone activities are exempt from stamp duty and fees.
For a trader selling mainly into Türkiye, the zone defers customs duty and import VAT until the goods enter Türkiye. It does not reduce the corporate tax on the profit.
Wages, social security and foreign staff
The wage benefit has its own test. If a company exports at least 85% of the FOB value of the products made in the zone, the income tax on its employees’ wages is cancelled through the withholding return. If annual sales fall below that ratio, the tax not collected is charged with a late-payment surcharge but without a penalty. The President may lower the ratio to 50%. Law 7577 did not change this test, which still refers to exports abroad.
Social security is not exempt. Turkish social security law applies in the zones (Law 3218, art. 10), so employer and employee premiums are paid as anywhere else. The same article allows foreign managers and qualified staff to be employed; for permits, see work permits and social security for Chinese and Hong Kong staff.
How does a company get a free-zone licence?
Licences are issued by the Ministry of Trade’s General Directorate of Free Zones (Law 3218, art. 5). Turkish and foreign firms benefit from the zones equally, so a wholly Chinese-owned plant is possible. The Ministry’s steps:
- Pay the fee. The 2026 application form shows USD 5,000 (or the lira equivalent), paid to the Central Bank of the Republic of Türkiye; it is refunded if the application is refused.
- Apply to the chosen zone’s directorate with the form, the bank receipt and the annexes, including three years’ financial statements. The General Directorate weighs production and export focus, technology level, investment and export commitments, employment, and fit with the zone’s purpose.
- Sign a lease within 30 days of approval, with the zone operator or a user licensed to let premises; in zones on private land you may buy land or premises instead. The licence is then issued.
- Build, if you are an investor user: construction and occupancy permits come from the zone directorate. Permits your activity needs from other public bodies still apply.
Licence terms depend on status: an investor user that builds or takes over its own premises receives 45 years for production and 30 years for other activities; a tenant receives 20 and 15 years.
Two 2026 changes: Decision 10819 (Official Gazette, 8 January 2026, No. 33131) limited support in specialised free zones to users from 1 January 2026. Users that meet the Ministry’s criteria can receive wage support for up to ten qualified employees (50% of gross pay, at most USD 15,000 a year each) and rent support (50%, at most USD 75,000 a year), each for up to five years (Decision 2635, arts. 3 to 5). A February 2026 amendment to the implementing regulation (No. 33160) concerns zone operators, not users.
Free zone or incentive certificate?
| Free zone (manufacturer) | Decision 9903 certificate | 12.5% rate | |
|---|---|---|---|
| Where | One of the 19 zones | Anywhere; support varies by region | Anywhere |
| Corporate tax | Exempt on export and zone sales; normal rules on sales into Türkiye (general rate 25%) | 10% instead of 25% until the contribution amount is used, at most ten periods | 12.5% on production profits from 2027, with an industrial registry certificate |
| Machinery and inputs | No customs duty on goods from abroad; VAT-free purchases from Türkiye | Customs duty and VAT exemption on certified machinery | No |
| Sales into Türkiye | Import: VAT and any customs duty | Ordinary domestic sale | Ordinary domestic sale |
Law 3218, art. 6 links the systems: users with exempt profits receive non-tax incentives set by the President; users without exempt profits can use tax and non-tax incentives under other legislation that they do not already use under this law. Certificate details: Türkiye’s new investment incentive system.
Large groups: minimum taxes and dividends
- 10% domestic minimum tax. Free-zone exempt profits are deducted when this minimum is computed (Corporate Tax Law, art. 32/C(2)(c)), and new companies are outside it for their first three accounting periods. See domestic minimum corporate tax.
- Global minimum tax. For groups whose consolidated revenue exceeded €750 million in at least two of the four preceding years, the 15% rules contain no free-zone carve-out. A low Turkish effective rate can lead to Turkish domestic top-up tax. See global minimum tax for Chinese and Hong Kong groups.
- Dividends. The Ministry notes that zone profits can be transferred abroad without permission, but the exemption does not affect dividend withholding, at a domestic rate of 15%. Treaty relief is explained in dividends and profit repatriation.
What this means for you
- Start from your sales split. The exemption covers sales abroad, within the zone and to other zones only, so a plant selling mostly in Türkiye gains little corporate tax benefit.
- Budget the domestic route: import VAT, any customs duty, the 0.9% fee and corporate tax at the normal rate.
- Large groups: test the zone or certificate against the 15% global minimum tax.
A free-zone company is still a Turkish taxpayer: it keeps books (Law 3218, art. 6) and files a monthly withholding return for its staff. Our bookkeeping and tax filing is part of both annual packages: Basic at USD 3,750 a year for existing companies, Professional at USD 4,950 a year plus government fees. Payroll costs USD 300 a month for 1–3 employees, USD 550 for 4–50 and USD 1,250 above 50. Investment incentives work is quoted per project; where a sworn financial adviser (YMM) report is required, you engage the YMM and pay the YMM’s fee separately. For in-scope groups, the global minimum tax notification costs USD 750. The free-zone operating licence application is not on our price list. Prices exclude VAT: no VAT is charged to clients invoiced outside Türkiye; 20% VAT is added for companies in Türkiye.
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