Sole proprietorship or company in Türkiye: tax comparison
Taxes and contributions for a sole proprietor under each available system and for your own company, for a resident of the chosen country with the same profit.
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Form
Sole proprietor
Sole proprietorŞahıs işletmesi (serbest meslek kazancı, gerçek usul)
Profit (revenue minus expenses and Bağ-Kur contributions) is taxed at progressive income tax rates of 15–40%. Bağ-Kur contributions are due every month even without profit.
Conditions
Registration with the tax office and SGK from the first day of activity; no revenue limit. VAT (KDV) applies from the first sale, there is no exemption threshold; VAT is not included in the calculation.
Business clients withhold 20% tax from fees (stopaj); it is an advance credited in the annual return (filed 1–25 March of the following year).
If the activity is organised as a commercial business (ticari kazanç), the tax rates and Bağ-Kur are the same; only the bookkeeping differs.
Sole proprietorŞahıs işletmesi — genç girişimcilerde kazanç istisnası (GVK mük. md. 20)
Same as a sole proprietor, but for the first three years profit up to TRY 400,000 a year is exempt from income tax. Bağ-Kur contributions are still due.
Conditions
Only if you are under 29 on registration and this is your first registration for commercial, agricultural or professional income; the business is not taken over from relatives. Applies to the start year and the next two.
Calculated without Bağ-Kur support. For the first 12 months the state may pay Bağ-Kur contributions on the minimum base (Law 5510, Art. 81/1-k), which lowers the burden.
The company pays 25% corporate tax. Dividends are subject to 15% withholding; half of the dividend is exempt, and if the other half exceeds TRY 400,000 it is declared at the 15–40% scale with the withholding credited. As a partner of a limited company the owner pays Bağ-Kur personally.
Conditions
A limited company partner is compulsorily insured with Bağ-Kur (Law 5510, Art. 4/1-b) even without salary; the contribution is personal, not a company expense.
The company is liable for VAT (KDV) from the first sale; VAT is not included in the calculation. Articles of association, paid-in capital and double-entry bookkeeping are required.
Business activity: IT and consulting services for business clients
One owner, resident of Türkiye, no employees, no other income, no children, full year 2026.
Bağ-Kur on the minimum base (TRY 33,030 a month) at 35.75% minus the 5-point discount for timely payment without arrears: TRY 10,156.73 a month.
For the sole proprietor Bağ-Kur contributions are deducted from profit as an expense. Income tax uses the 2026 scale for non-wage income.
For the company: the owner takes no salary; profit after tax is either paid out in full as dividends or kept in the company. Dividends below the filing threshold bear only the 15% withholding.
Not included: VAT, stamp duty on the return, the 5% compliant-taxpayer discount (GVK repeated Art. 121), local fees.
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