Primetax Guide: Türkiye’s Service Export and Qualified Service Centre Incentives - A Comparative Guide to Articles 10/1-ğ and 10/1-j of the Corporate Tax Law

1. Two Different Incentives for International Service Activities

Türkiye’s tax framework for international service businesses changed significantly in 2026.

Article 10/1-ğ is the established service export deduction. It applies to profits arising from certain specified services performed in Türkiye for customers abroad. Although the statutory deduction rate remains 80%, the President may determine the applicable rate between 0% and 100%. Presidential Decree No. 11257 currently sets the rate at 100% for taxation periods beginning on or after 1 January 2026.

Article 10/1-j was introduced separately by Law No. 7582, published in June 2026. It created a new incentive for companies operating in Türkiye as Qualified Service Centres (“QSCs”) within international groups. The standard deduction is 95% of qualifying profits derived from abroad and is available for 20 accounting periods. At the current standard corporate income tax rate of 25%, this corresponds to an effective corporate tax burden of approximately 1.25% on qualifying QSC profits.

The two provisions address different business models. Article 10/1-ğ primarily concerns the direct export of specified services, whereas Article 10/1-j is designed for a regional or shared service centre serving related companies within an international group.

That distinction is more important than the headline comparison between a current 100% deduction and a 95% deduction.

2. Article 10/1-ğ: The Service Export Deduction

Article 10/1-ğ applies to profits arising from a defined range of services supplied from Türkiye to qualifying customers abroad.

The services covered include architecture, engineering, design, software, medical reporting, bookkeeping, call centre services, product testing, certification, data storage, data processing, data analysis, certain vocational training services and qualifying education and healthcare services.

The provision is therefore not a general incentive for all services exported from Türkiye. A foreign customer, an invoice issued in foreign currency, or payment received from overseas does not, by itself, establish eligibility. The underlying service must fall within one of the categories covered by the legislation.

For the ordinary service categories, the service must be performed in Türkiye and supplied to a non-resident person or to an entity whose workplace, legal seat and business centre are outside Türkiye. The invoice or equivalent document must be issued to the overseas customer and, as a general rule, the service's benefit must arise exclusively outside Türkiye. In administrative guidance, this means that the service should relate to the foreign customer’s activities outside Türkiye rather than to its Turkish operations.

The qualifying activity should also be reflected in the company’s stated business activities, and the income, costs and expenses relating to qualifying activities should be capable of being identified separately from other business lines.

Education and healthcare services are subject to specific conditions and should be considered under their own rules rather than by mechanically applying the ordinary foreign-use test.

A further condition is that the qualifying profit must be transferred to Türkiye by the deadline for filing the annual corporate income tax return for the relevant accounting period. This repatriation requirement applies to qualifying profits earned from 1 January 2023 onwards.

3. The Current 100% Rate under Article 10/1-ğ

The Article 10/1-ğ deduction is calculated by reference to net qualifying profit, not turnover. Revenue from the qualifying service must first be reduced by the expenses and costs attributable to that activity.

If, for example, a company earns TRY 150 from qualifying services and incurs TRY 50 of directly attributable and properly allocated costs, its qualifying profit is TRY 100. At the currently applicable 100% deduction rate, the entire TRY 100 may be deducted from the ordinary corporate income tax base.

In that simplified case, the ordinary Turkish corporate income tax attributable to the qualifying profit would therefore be nil.

The current 100% rate should not, however, be viewed as a permanent statutory rate. Article 10/1-ğ itself retains an 80% rate and gives the President authority to set the applicable percentage between 0% and 100%. Presidential Decree No. 11257 is the current exercise of that authority.

That distinction matters for a business making a long-term investment decision. A tax model may properly use the 100% rate currently in force, but it should not assume that the rate cannot change in later years.

The domestic minimum corporate income tax rules must also be considered separately, as discussed below.

4. Article 10/1-j: The Qualified Service Centre Regime

The QSC regime takes a different approach. Rather than focusing on the export of individual services, it looks to the role the Turkish company plays within an international group.

The definition of a QSC is contained in Additional Article 1 of Foreign Direct Investment Law No. 4875. A QSC must be a capital company established to provide the qualifying services to related companies or a group that is actively operating in at least three different countries. At least 80% of the company’s annual revenue must be derived from related companies or the relevant group outside Türkiye.

Article 10/1-j is therefore inherently group-facing. Article 10/1-ğ, by comparison, may apply to qualifying services provided to either related parties or independent foreign customers.

The three-country requirement and the 80% revenue threshold are central conditions of QSC status. The relevant group structure, the companies receiving the services and their genuine activities in the relevant jurisdictions should therefore be identified before the Turkish centre becomes operational.

The 80% threshold is an annual revenue test, not a profit test. A QSC may have other revenue streams without necessarily losing its status, provided it continues to meet the statutory threshold. This should not be confused with the scope of the deduction itself: only profits arising from qualifying QSC activities and derived from abroad benefit from Article 10/1-j.

For centres operating close to the threshold, therefore, monitor the revenue mix throughout the year rather than leaving it to the year-end tax computation.

5. The Wider Range of Services Covered by Article 10/1-j

The QSC regime covers a significantly broader range of functions than Article 10/1-ğ.

The legislation expressly includes financial consultancy, strategic management consultancy, risk management, cash and liquidity management, funding and borrowing transactions, 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 consultancy within the statutory framework, promotion, brand management, human resources and training.

It also covers coordination and management services relating to those functions. In addition, the law refers to coordination and management services relating to operational areas such as sales, after-sales support, technical support, research and development, external procurement and testing of newly developed products.

This wider scope is commercially important. A regional finance, treasury, strategic management, HR or technology function may not fall naturally within the more limited list in Article 10/1-ğ but may fit directly within Article 10/1-j.

Nevertheless, the wording of the legislation should be followed carefully. For the second group of operational activities, the QSC definition refers to coordination and management services relating to those activities, rather than automatically treating every underlying operational activity as a qualifying QSC service.

6. Direct Service Export or Regional Service Centre?

The practical dividing line between the two regimes lies in the functions the Turkish company actually performs.

Where the Turkish company itself performs one of the services specifically listed in Article 10/1-ğ and supplies that service to a foreign customer, Article 10/1-ğ will generally be the natural starting point.

Where the Turkish company acts as the group’s regional platform for strategic management, finance, treasury, reporting, technology, data, HR or other shared functions, Article 10/1-j may provide the more appropriate framework.

The classification should follow the commercial reality rather than the wording chosen for an invoice. A service does not become eligible because it is described as “regional support”, “management” or “consultancy”. The company’s personnel, responsibilities, decision-making authority, risks and deliverables should support the tax position taken.

For this reason, service mapping and functional analysis should normally be carried out before intercompany agreements, invoicing arrangements and transfer pricing policies are finalised.

7. How the QSC Deduction Works

Article 10/1-j allows 95% of qualifying profits earned exclusively from QSC activities and derived from abroad to be deducted from the corporate income tax base. The qualifying profit must also be transferred to Türkiye by the annual corporate income tax return filing deadline.

The deduction is calculated on net profit. If a QSC generates TRY 150 of qualifying revenue and incurs TRY 50 of attributable costs and expenses, its qualifying net profit is TRY 100. A 95% deduction reduces the taxable amount to TRY 5. At the current standard 25% corporate income tax rate, the resulting corporate tax is TRY 1.25.

The often-quoted 1.25% effective rate therefore relates only to qualifying QSC profit. It does not apply to all income of the Turkish company.

The deduction increases to 100% for QSCs operating in qualifying industrial zones approved under the statutory Presidential mechanism and for QSCs operating in the Istanbul Finance Centre under a participant certificate obtained pursuant to Law No. 7412.

Article 10/1-j also authorises the President to reduce the applicable deduction rate to 50% or increase it to 100%. Long-term modelling should therefore distinguish between the incentive's statutory structure and the percentage applying at any given time.

8. The 20-Accounting-Period Limitation

Unlike Article 10/1-ğ, the QSC incentive has a fixed statutory duration.

The deduction applies for 20 accounting periods beginning with the accounting period in which the QSC commences its qualifying activities. A short first accounting period counts as one of those 20 periods.

The commencement date can therefore have a real economic effect. Where a centre is expected to become operational close to the end of an accounting period, an early commencement may use the first incentive period while the business is still at a very limited scale.

Accordingly, consider the timing of commencement alongside contractual readiness, staffing, operational capability, and expected revenue generation. The purpose is not to delay genuine business activity for tax reasons, but to avoid starting the 20-period clock before the centre is in substance ready to perform its intended functions.

9. Repatriation, Profit Tracking and Other Operating Rules

Both regimes contain a repatriation requirement. Under Article 10/1-j, the qualifying profit must be transferred to Türkiye by the deadline for filing the annual corporate income tax return for the period in which it was earned. If the deadline is missed, a subsequent transfer does not restore the deduction. Article 10/1-ğ contains a comparable requirement.

This makes the timing of intercompany settlements a tax issue as well as a treasury issue. Groups using either incentive should build the relevant deadline into their normal cash-management procedures rather than relying on a year-end tax adjustment.

Corporate Income Tax General Communiqué Serial No. 26 also requires QSC income, costs and expenses to be tracked in a way that allows qualifying profit to be identified separately. Where resources are shared between qualifying and non-qualifying activities, allocate common costs using a reasonable, consistently applied methodology.

This has practical implications for the accounting setup. Separate service codes, customer classifications, cost centres and appropriate general-ledger mapping can make a material difference to the robustness of the calculation. Similar discipline is advisable under Article 10/1-ğ where qualifying and non-qualifying activities are carried out through the same legal entity.

The QSC rules also provide that an unused Article 10/1-j deduction cannot be carried forward where it cannot be utilised because of other deductions, exemptions or prior-year losses. No deduction arises where the qualifying activity itself produces a loss. A newly established QSC with a lengthy start-up phase should therefore model the expected profitability profile before the 20-period incentive window begins.

Income that does not arise from the qualifying QSC activity remains outside the deduction. Communiqué No. 26 identifies items such as certain interest income, foreign-exchange valuation gains, asset disposal gains and extraordinary income as examples. The QSC incentive should therefore never be presented as a blanket 1.25% tax rate for the Turkish entity as a whole.

10. Domestic Minimum Corporate Income Tax

Türkiye’s domestic minimum corporate income tax regime is one of the most important differences between the two incentives.

Under Article 32/C, corporate income tax is subject to a domestic minimum tax calculation based broadly on 10% of the relevant minimum tax base after the deductions and adjustments specifically permitted by the legislation.

The Article 10/1-ğ deduction is not expressly protected in that calculation. Consequently, a company may reduce its ordinary corporate income tax on qualifying service export profits to nil under the currently applicable 100% rate and nevertheless have a domestic minimum corporate income tax liability.

In a simplified case involving TRY 100 of qualifying Article 10/1-ğ profit, the ordinary corporate income tax may be nil after the current 100% deduction, while the same TRY 100 may remain within the minimum tax calculation and produce a minimum tax of TRY 10, subject to the taxpayer’s full Article 32/C position.

Article 10/1-j is treated differently. Law No. 7582 expressly amended Article 32/C so that the QSC deduction is taken into account in determining the domestic minimum corporate income tax base.

Using the same simplified TRY 100 example, a 95% QSC deduction leaves TRY 5 subject to ordinary corporate income tax. At 25%, the ordinary tax is TRY 1.25. The protected deduction also reduces the simplified minimum tax base to TRY 5, producing a minimum tax amount of TRY 0.50. The ordinary tax of TRY 1.25 therefore remains the relevant liability.

This minimum-tax protection is one of the QSC regime's strongest long-term features.

11. Newly Established Companies

The comparison is different during the initial years of a genuinely new Turkish company.

The domestic minimum corporate income tax does not apply to a first-time corporate taxpayer for the accounting period in which it commences activities and the following two accounting periods.

Where a genuine new company commences activities in 2026, it may therefore remain outside the domestic minimum corporate income tax regime for 2026, 2027 and 2028.

During that period, qualifying Article 10/1-ğ profits may benefit from the currently applicable 100% deduction without a domestic minimum tax overlay. If the other conditions are met, this can produce an effective ordinary Turkish corporate income tax burden of nil.

The first-time taxpayer treatment is not available merely because a new legal entity appears in a restructuring. Companies established through merger, transfer, conversion of legal form, partial demerger or full demerger do not qualify for the three-accounting-period minimum-tax exclusion.

The economic comparison between the two regimes therefore changes over time. Article 10/1-ğ may be exceptionally attractive during the first three accounting periods of a genuine new operation. Article 10/1-j generally produces an effective corporate tax burden of approximately 1.25% from the outset at the standard 95% deduction rate, but provides a 20-period incentive and continuing protection from domestic minimum corporate income tax.

12. The Employee Incentive Available to QSCs

The QSC package extends beyond corporate income tax.

Law No. 7582 introduced a separate income tax exemption for employees directly performing qualifying QSC services. For an ordinary QSC, the specific exemption applies to the part of the employee’s remuneration not exceeding three times the gross minimum wage. For qualifying centres in approved industrial zones and the Istanbul Finance Centre, the threshold increases to five times the gross minimum wage. Support personnel are excluded from the definition of qualifying service personnel.

Article 10/1-ğ does not carry a comparable dedicated employee tax incentive.

For a labour-intensive shared service centre, the employment-side relief can therefore be an important part of the overall business case for locating the relevant functions in Türkiye.

13. VAT, Transfer Pricing and Substance

Neither Article 10/1-ğ nor Article 10/1-j determines the Turkish VAT treatment.

The VAT service export exemption is governed separately under the VAT Law. The corporate income tax and VAT analyses should therefore be kept separate. A service may satisfy the requirements of a corporate income tax incentive without necessarily qualifying for the VAT service export exemption, and the reverse may also be true.

This is particularly relevant for management and coordination services, where careful consideration may be required as to where the service benefit arises.

Transfer pricing is equally important, particularly under Article 10/1-j because the QSC model is inherently related-party in nature. The Turkish company must earn an arm’s-length return that reflects the functions it actually performs, the assets it uses and the risks it assumes.

A sustainable QSC should therefore have the personnel, systems, expertise and decision-making capability needed to perform the functions for which it is remunerated. Intercompany agreements, employee responsibilities, management arrangements, and actual conduct should be consistent with the transfer pricing analysis.

The tax incentive applies to the profit properly attributable to the Turkish activities. The availability of a low effective tax rate should not itself be used as a reason to allocate additional group profit to Türkiye beyond an arm’s-length amount.

14. Can the Two Regimes Be Used in the Same Company?

Potentially, yes.

The analysis does not necessarily have to be made at entity level. A Turkish company may carry on several service lines with different tax characteristics. Certain directly performed services may fall within the specific categories covered by Article 10/1-ğ, while broader regional or shared-service functions may be more appropriately analysed under Article 10/1-j.

Where both provisions are relevant, the underlying functions, customers, personnel, contracts, invoices, revenues, direct costs, common cost allocations and resulting profits should be capable of being distinguished.

The purpose of that segregation is to identify the appropriate tax treatment for each service stream. It should not result in the same profit being treated as eligible for two deductions.

For businesses with mixed functions, a service-line analysis is therefore generally more useful than trying to characterise the Turkish company as being wholly within one regime or the other.

15. Choosing Between Article 10/1-ğ and Article 10/1-j

The starting point should be the commercial model.

Article 10/1-ğ will generally be more relevant where the Turkish company directly performs one of the specifically listed services and supplies it to a customer abroad. It does not require the foreign customer to be a related party, there is no three-country condition or 80% group revenue threshold, and the current rate is 100%.

Its limitations are equally important. The statutory service list is narrower, the foreign-use condition applies to most qualifying services, the current 100% rate is subject to Presidential authority, and the deduction is not specifically protected from domestic minimum corporate income tax once the first-time taxpayer exclusion has expired.

Article 10/1-j is likely to be more relevant where Türkiye is intended to house a genuine regional or shared service centre serving an international group. The entry conditions are more demanding, but the regime accommodates a much wider range of finance, management, technology, data, HR and coordination functions.

The 20-accounting-period duration, protection from domestic minimum corporate income tax and employee tax incentive provide a stronger framework for a long-term regional service centre investment.

The choice is therefore not simply between a 100% deduction and a 95% deduction.

It is primarily a choice between direct service export and a regional or shared service centre model.

For some businesses, both may form part of the answer.

16. Pillar Two

For multinational groups within the scope of the OECD Pillar Two rules, the Turkish corporate income tax result is not necessarily the final group tax result.

Türkiye has implemented local and global minimum top-up tax rules for multinational groups meeting the relevant EUR 750 million consolidated revenue threshold, based on a 15% minimum effective tax rate framework.

A 0% or 1.25% Turkish corporate income tax result under Articles 10/1-ğ or 10/1-j does not therefore necessarily mean that the group retains the full benefit at consolidated level.

For in-scope groups, the interaction with Türkiye’s domestic minimum top-up tax, GloBE income, covered taxes, the substance-based income exclusion and any available safe harbours should be modelled separately.

This analysis should also be distinguished from the domestic minimum corporate income tax under Article 32/C, which is a separate Turkish tax regime.

Primetax Perspective

The 2026 changes give groups considering Türkiye for international service activities a considerably wider range of structuring options.

Article 10/1-ğ remains a highly attractive regime where the Turkish company directly performs services that clearly fall within its statutory scope. At the rate currently set under Presidential Decree No. 11257, qualifying profits may be fully deducted for ordinary corporate income tax purposes. For a genuine first-time taxpayer, the position can be particularly favourable during the first three accounting periods because the domestic minimum corporate income tax does not apply.

That advantage needs to be viewed in context. The 100% rate is not permanently embedded in the Corporate Tax Law and Article 10/1-ğ does not benefit from specific domestic minimum tax protection once the first-time taxpayer period has ended.

Article 10/1-j offers a different proposition. It requires an international related-party structure, a three-country footprint and an 80% foreign related-party revenue threshold, but in return it provides access to a much broader range of regional and shared-service functions. Its 20-accounting-period duration, domestic minimum tax protection and accompanying employee incentive make it particularly relevant where a group is considering a long-term regional presence in Türkiye.

For businesses with several service lines, the optimum answer may not be to choose one regime for the entire Turkish operation. Different functions may fall under different provisions, provided they are identified, priced, and documented separately.

The important work should therefore be carried out before the operating structure becomes fixed. The scope of services, personnel, contractual responsibilities, transfer pricing, invoicing, accounting segregation and treasury arrangements should all reflect the functions the Turkish company will genuinely perform.

A tax structure built around the business is likely to be both more valuable and more defensible than one built around the headline deduction rate alone.