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Legal Alerts

New Incentive for IPOs: Corporate Tax Reductions

Legal Alerts
Capital Markets

Recent Development

The Law on the Restructuring of Certain Receivables and Amendments to Certain Laws No. 7256 published in the Official Gazette No. 31307 on November 17, 2020 introduced several amendments to the tax legislation. Please see our Legal Alert about these changes here.

One of these changes is particularly important for Turkish capital markets. The amendment (“Amendment“) to Article 32 of the Corporate Tax Law No. 5520 provides tax rate reductions for companies going public on the Borsa Istanbul Stock Market.

What Does the Amendment Say? 

According to the Amendment, the corporate tax rate applied to the corporate income of companies going public on the Borsa Istanbul Stock Market will be applied with a two (2) point discount (instead of the default 20% rate) for five accounting periods, starting from the first accounting period in which the offering was made, provided that the shares representing no less than 20% of the total share capital of the issuer are being offered.

In the event that the above free float rate requirement cannot be maintained during the five year period, the taxes that were not accrued due to the rate deduction will be collected along with the applicable default interest, but without the tax loss penalty.

The tax rate reduction will not apply to banks, leasing companies, factoring companies, financing companies, payment and electronic money institutions, authorized foreign exchange institutions, asset management companies, capital market institutions, insurance and reinsurance companies, and pension companies.


The Amendment aims to incentivize IPOs by offering a significant tax expenses advantage for companies considering a public offering of their shares.