Application of the 12.5% Corporate Income Tax Rate on Manufacturing Income of Companies Holding an Industrial Registry Certificate as of 2027

Law No. 7582, published in the Official Gazette dated June 4, 2026 and numbered 33270, introduced a significant amendment to Article 32 of Corporate Income Tax Law No. 5520.

Pursuant to this amendment, for the 2027 fiscal year and subsequent taxation periods, a 12.5% corporate income tax rate will apply to income derived exclusively from manufacturing activities by companies that hold an Industrial Registry Certificate and are actively engaged in manufacturing activities.

In order for the 12.5% corporate income tax rate to apply to income derived from manufacturing activities, the following conditions must generally be met together:

• The company must hold an Industrial Registry Certificate,
• The company must actually engage in manufacturing activities,
• The income subject to the reduced rate must be derived from manufacturing activities,
• The income derived from manufacturing activities must be identifiable and separable from income derived from the company's other activities.

The additional 5-point corporate income tax reduction applicable to export income will not apply to income from manufacturing activities that is already subject to the 12.5% corporate income tax rate.

The amendment covers not only industrial manufacturing but also income derived from agricultural production activities.

Companies engaged in agricultural production are not required to hold an Industrial Registry Certificate. However, according to the relevant explanations in the Corporate Income Tax General Communiqué, companies engaged in agricultural production must hold at least one of the following documents and actually carry out agricultural production activities:

• Farmer Registration Certificate,
• Food Business Registration Certificate, or
• Business Approval Certificate (Producer Certificate).

The Corporate Income Tax General Communiqué also provides that taxpayers holding an Industrial Registry Certificate may benefit from the 12.5% corporate income tax rate on income derived from software, information technology, and similar production activities carried out within the scope of such certificate, provided that the relevant conditions are met.

Where manufacturing and other activities are carried out together, income, costs, and expenses relating to manufacturing activities should be tracked separately to the extent possible. Common expenses should be allocated to the relevant activities using appropriate allocation keys.

The amendment will apply starting from the first provisional tax period of the 2027 fiscal year.

You may access the relevant announcement here. (In Turkish)