Significant Tax Advantage for Software Development Companies Bu kişiliği beğeniyor musun?

An important tax regulation will become applicable to companies operating in the software industry starting in 2027.

Under the amendment to Article 32 of Corporate Income Tax Law No. 5520, companies holding an Industrial Registry Certificate and actively engaged in software production within the scope of that certificate may benefit from a reduced corporate income tax rate of 12.5% on profits derived exclusively from their qualifying production activities.

For the 2026 fiscal year, the corporate income tax rate applicable to profits from the same qualifying production activities remains 24%.

What Does the Regulation Cover?

In accordance with the amendments introduced by Law No. 7582 and the explanations provided in Corporate Income Tax General Communiqué Serial No. 26, profits derived from software, information technology and similar production activities carried out within the scope of an Industrial Registry Certificate may qualify for the reduced corporate income tax rate.

These rates apply exclusively to profits derived from qualifying production activities by companies that meet the relevant statutory requirements.

Does All Software-Related Income Qualify for the Reduced Rate?

The fact that a company engages in software development does not automatically mean that all of its profits are eligible for the reduced corporate income tax rate.

For example, where a company develops its own software products while also providing installation, maintenance, technical support or consultancy services, profits generated from these activities must be assessed separately according to their nature.

Particularly in licensing and subscription-based business models, it is necessary to determine whether the income originates from the company's own production activities or from other services or commercial operations. This assessment should take into account the Industrial Registry Certificate, contractual arrangements and the actual substance of the transactions.

Implications for Companies

The new regulation has the potential to provide a significant tax advantage for companies engaged in software production.

However, merely holding an Industrial Registry Certificate is not sufficient to benefit from the reduced corporate income tax rate. Companies must accurately identify the production activities covered by the certificate and determine the profits attributable to those activities.

For companies conducting service or commercial activities in addition to production, it is important to calculate the portion of the corporate income tax base eligible for the reduced rate in accordance with the relevant legislation.

Accordingly, software companies should review their business activities, the scope of their Industrial Registry Certificates, revenue streams and contractual arrangements before the 2027 fiscal year.

Properly distinguishing production profits from profits generated by other business activities is also essential for mitigating potential tax risks associated with the application of the reduced corporate income tax rate.

Effective Date and Applicable Period

The new regulation will apply to profits earned during the 2027 fiscal year and subsequent taxation periods. For companies with special accounting periods, the regulation will apply from the special accounting period commencing in the 2027 calendar year.