Turkey's Revenue Administration has announced the publication of a guide (brochure) on the tax reduction (discount) for compliant taxpayers, which is equal to 5% of the individual income tax or corporate tax liability declared in the annual return. The guide clarifies that the 5% tax reduction is available for:

• Individual (income) taxpayers engaged in commercial, agricultural, and professional activities; and
• Corporate taxpayers, excluding those operating in the finance and banking sectors, insurance and reinsurance companies, and pension companies and pension mutual funds.

The guide also explains the conditions for the reduction, which include:

1. The tax return for the year the reduction is claimed and for the previous two years must be filed within the legal deadline;
2. No additional or administrative assessments have been finalized in respect of the returns; and
3. The taxes due according to the returns have been paid and, in any case, no unpaid tax debts exceeding TRY 1,000.

One change that applies in 2022 is in relation to the second condition regarding assessments. This includes that the condition will still be considered met as long as such assessments are less than 1% of the reduction limit. The reduction limit is equal to TRY 2 million for annual returns submitted from 1 January 2022. The guide also explains that taxpayers must submit other tax returns within the legal deadlines to qualify for the income/corporate tax reduction, including VAT and special consumption tax returns.