Turkey's 2026 tax guide for software service exports: 100% deduction, KDV exemption and sole proprietorship vs limited

The short answer: the 2026 summary

If you provide software services to clients abroad from Türkiye, the most important change for 2026 is this: the earnings deduction for exporting services is now 100%. Presidential Decision 11257 (Official Gazette, 30 April 2026, issue 33239) sets the rate to 100% for tax periods starting on 1 January 2026, both for income tax under Income Tax Law (GVK) art. 89/13 and for corporate tax under Corporate Tax Law (KVK) art. 10/1-ğ. The previously verified rate was 80%.

But this does not mean “no tax” or “no VAT”. What we are talking about is a deduction from earnings that is applied on the tax return once the conditions are met; throughout this article I use the word “deduction” in that sense. It does not remove SGK or Bağ-Kur contributions, stamp duty or accounting fees. And in a limited company the minimum corporate tax calculation matters separately.

The guide follows the order of questions a developer selling software or IT services would ask: the conditions, the rate history, KDV (VAT), a sole proprietorship or a limited company, and the documents. I have marked what I read in the official text separately from my own interpretation, and where I could not verify something I left it as “kontrol edin” (check it).

• Income and corporate tax: for earnings from qualifying exports of services, the deduction rate for 2026 is 100%.
• KDV (VAT): a service provided to a customer abroad and used abroad is exempt; according to the archived GİB text, code 302 is used on the return.
• Sole proprietorship: in the simple example below the taxable income after the deduction is 0 TL, and the return is still filed.
• Limited company: the deduction calculation alone may give 0, but that is not the tax payable; the 10% minimum corporate tax must be examined separately.
• In both cases the conditions must be documented and confirmed by a mali müşavir.

What is an export of services? The conditions

GVK art. 89/1-13 (individuals) and KVK art. 10/1-ğ (limited and joint-stock companies) cover services rendered in Türkiye and used only abroad. The buyer must be a person or entity that is not resident in Türkiye, or whose workplace, legal centre and business centre are abroad. The listed fields of service include software, design, engineering, data processing and data analysis; the list is not limited to those. Check in the GİB statute text in the sources section whether your own service is on the list.

The four conditions in the diagram can be summed up as I read them in the statute:

• Type and place of use: one of the listed fields; rendered in Türkiye and used only abroad.
• Buyer: not resident in Türkiye, or with workplace, legal centre and business centre abroad.
• Document: the invoice or similar document is issued in the foreign buyer's name.
• Transfer of the earnings to Türkiye: the whole profit, by the annual return deadline for individuals and by the corporate tax return deadline for limited and joint-stock companies.

The “used only abroad” condition is the part that raises the most questions in practice. On the KDV side, the archived GİB General Application Communiqué explains “benefit abroad” as follows: the service must relate to the customer's business abroad and have no link to its activities in Türkiye (section 4). Do not assume the same test applies one-to-one to the income and corporate tax condition; confirm that with your mali müşavir.

From 80% to 100%: the verified rate history and Decision 11257

Below I give only the steps I could verify in official sources. I deliberately left out the older rate history because I could not re-verify the original text in this check.

For individuals, Law 7491 art. 10 set the rate to 80% in GVK 89/13 and added the condition that the earnings be transferred to Türkiye; it applies to income from 1/1/2023 and entered into force on 28/12/2023. For companies, Law 7491 art. 59 set the rate in KVK 10/1-ğ to 80% from 1/1/2023.

Article 1/2 of Presidential Decision 11257 sets the rate to 100% for GVK 89/13 and article 2/2 sets it to 100% for KVK 10/1-ğ; both apply to tax periods starting on 1/1/2026. I read the decision from GİB's accessible copy and GİB's explanatory note; the Official Gazette link stays in the sources as the official place of publication, but I could not open it directly in this check.

The authority delegated by the statute allows the rate to be set anywhere between 0 and 100%. So 100% is not a fixed entitlement: it can change again. Do not base pricing or company-structure decisions on today's rate alone.

A note on terms: the words “exemption”, “relief” and “deduction” can get mixed up in sources. This mechanism is an earnings deduction applied on the return; it is not a blanket income or KDV exemption and it does not guarantee that you will owe no tax or other charges.

The KDV exemption and code 302

The KDV side is a separate matter from income tax. The basis is KDV Law art. 11/1-a and 12/2, with application details in section II.A.2 of the KDV General Application Communiqué. The text of the communiqué that I could access in the GİB archive (I could not verify that it is the latest consolidated version) asks for two conditions for the export-of-services exemption: the customer is abroad and the benefit of the service is used abroad.

“Benefit abroad” is understood in the archived text as follows: the service must relate to the customer's business abroad and have no link to its activities in Türkiye. This wording uses the same words as the income tax condition in section 2 but belongs to separate legislation; check each one separately.

A service to a customer in a free zone does not automatically fall under this “export of services to a foreign customer” category; separate free-zone exemption rules exist. Do not generalise to “every service to a free zone is subject to KDV” or “all of them are exempt”; check your own situation.

The archived text describes the exemption being declared on the KDV Return No. 1, in the return for the period in which the service was completed, under code 302. So 302 is not an application number but the code under which the exemption is shown on the return. I could not confirm that the invoice-list or petition workflow in that text is still current today, so I am not giving a step-by-step filing guide. Ask your mali müşavir for the current procedure.

One more distinction: declaring the exemption is not the same as getting a refund of the input KDV you bore. According to the archived text no proof of payment is needed to declare the exemption, but a refund requires foreign-currency receipt evidence. I deliberately do not give the refund details (thresholds, exceptions for TL invoices and TL receipts, current procedure): they are unverified, so check them.

Invoice type: I did not verify in this article whether a service-export invoice is issued as an e-fatura or an e-arşiv invoice. Do not pick a format without your mali müşavir's confirmation. Under the income tax condition the invoice must be issued in the foreign buyer's name; ask what else the invoice must say as well.

Sole proprietorship or limited company?

The two structures are taxed under different laws: a sole proprietorship pays income tax (GVK 89/13), a limited company pays corporate tax (KVK 10/1-ğ), and when profit is distributed from the company to a person, withholding comes into play as well. The deduction rate is 100% for both, but the result is not the same. The diagram sums up the difference; the numbers come from the simplified example below.

A simplified example: 1,200,000 TL of net profit in 2026, entirely from qualifying software service exports; no other income, and all conditions met. Bağ-Kur, accounting and other costs are not included.

With the 100% deduction, the taxable income from this activity is 0 TL. Because the deduction is applied on the return, the return is still filed. The 302,500 TL above is only a comparison to show the effect of the deduction.

This example does not mean that “a sole proprietorship is always better”; it only shows that the tax mechanics of the two structures work differently. When you decide, plan separately for whether profit stays in the company or is distributed to a person, SGK and Bağ-Kur contributions, stamp duty, accounting fees and company formation costs. I give no figures for these items; they were not researched for this article.

The minimum corporate tax, and why the final tax calculation can differ

KVK art. 32/C (Law 7524 art. 36) says that corporate tax cannot be less than 10% of the profit before deductions and exemptions. GİB records this article as applying to tax periods from 2025 onward. Law 7582 art. 9 updated 32/C(2) with conditions covering periods starting in 2026 and returns due from July 2026; read the details of those conditions in the current text.

Paragraph 32/C(2) lists the items that can still be deducted: 5/1 (a, ç, i, j, k and part of d), 10/1 (g), (h), (i), (j), and technology park, R&D and other items. 10/1-ğ is not in this list.

Interpretation: because 10/1-ğ is not in the list, the export-of-services deduction does not seem to remove the minimum tax base by itself. That is not a sentence of the statute; it is my reading. Paragraph 32/C(3), on the other hand, provides some offsets, including export-rate reductions, and 32/C(5) covers new companies: companies are exempt from the minimum tax in their first 3 accounting periods after starting activity. I could not verify how these provisions combine with the calculation in the example without a current GİB worked example; so do not read 120,000 TL as the final tax.

The general corporate tax rate is 25% (KVK 32/1, latest rate amendment Law 7456 art. 21, 2023). Special sectors and export-rate reductions differ; do not apply this rate to every company, and do not derive an unconditional effective tax rate from it.

Ask your mali müşavir for a written calculation with your own numbers and ask these questions: does the 10/1-ğ deduction apply to my company, which amount do the 32/C(3) offsets change, does the exemption for the first 3 accounting periods apply to me, and if I distribute profit, how do withholding and the personal return work?

Other incentives to ask your mali müşavir about

The export-of-services deduction is not the only incentive, but I did not verify the conditions and amounts of the others. This section is a list of questions, not answers:

• The young entrepreneur exemption (GVK additional art. 20): do I meet its conditions, and how does it work together with the export deduction? I give neither the conditions nor the amount here; read the current text in the GİB statute index in the sources.
• Technology park and R&D: these items appear in the KVK 32/C(2) list; do they apply to my activity, and how are they used together with the export deduction?
• Dividends: there is 15% withholding on distribution; separately, whether this dividend goes on the personal annual return (the reporting situation must be assessed separately).
• Items to be planned separately: SGK and Bağ-Kur contributions, stamp duty, accounting fees and company formation costs. This article has no figures for them.

Prepare these questions in writing and ask for the answers in writing too: rates and conditions can change and you need to document the situation on the date of your decision.

Documents and practical steps

The weakest point of the deduction and the KDV exemption is often the paperwork: a condition may be met, but if you cannot prove it, it does not help. The table below shows which document supports which condition.

Proceed in order: first prepare the contract, then deliver the service, issue the invoice in the foreign buyer's name, record the payment and the transfer of the earnings to Türkiye, and only at the end apply the deduction and the KDV exemption on the returns. I found no official source on the non-tax legal obligations around transferring earnings to Türkiye; this article covers only the tax conditions.

Common mistakes

The main mistakes and checkpoints that follow from the information in this article are these:

• Using the stale 80% figure: for tax periods starting on 1/1/2026 the rate is 100% (Decision 11257). But the rate can change again; look at the date.
• Treating a free-zone customer automatically as exempt (or automatically as subject to KDV): separate free-zone rules exist, so check.
• A SaaS product aimed at users in Türkiye: if the software service you provide to a company abroad relies on that company serving its product to users in Türkiye, the “used only abroad” condition may be strained. This is not a definitive ruling but a checkpoint; consult a mali müşavir.
• Treating the deduction as “no tax”: the return is still filed, and other obligations (contributions, stamp duty, accounting fees) stand separately.
• Assuming the tax payable in a limited company is 0: the minimum corporate tax calculation must be done separately.
• Confusing the 10% minimum corporate tax with the 15% dividend withholding: they are different taxes and arise at different stages.
• Issuing the invoice in the wrong name, or forgetting to transfer the earnings to Türkiye by the return deadline: both are conditions in themselves.

The common remedy for all of them is the same: a dated official source, the documents and a written confirmation from a mali müşavir. The checklist below collects this item by item.