New Omnibus Tax Law is under discussion in the Parliament

On 17 October 2025, a draft law titled “Law Amending Certain Tax Laws and Other Laws and Decree Law No. 631” was submitted to the Turkish Grand National Assembly. The law introduces significant amendments to the tax and social security legislation. Although the legislative process has not yet been completed, the key proposed changes are summarized below

1. Proposed Amendments to Social Security Legislation

Increase of the Upper Limit of Earnings Subject to Social Security Premiums

The upper limit of daily earnings subject to premiums is proposed to be increased from 7.5 times to 9 times the minimum wage.

Effective date: 1 January 2026

Increase of the Premium Rate for Service Borrowing and Bağ-Kur Reinstatement
Except for maternity-related service borrowings, the premium rate applicable to service borrowings and Bağ-Kur reinstatements will be increased from 32% to 45%.

Effective date: 1 January 2026

Increase in the Premium Rate for Disability, Old-Age and Death Insurance

For voluntary insured individuals, agricultural workers, part-time employees, and domestic workers working less than 10 days per month, the premium rate for disability, old-age, and death insurance will be raised from 20% to 21%.

Effective date: January 2026

Increase in Long-Term Insurance Premiums and Revision of Incentives

The employer’s share of long-term insurance premiums will be increased from 11% to 12%. The Treasury support of 4 percentage points provided to non-manufacturing sectors will be reduced to 2 points. In addition, the one-year premium support for young entrepreneurs will be abolished.

Effective date: January 2026

Authority Granted to the President Regarding State Contribution in Private Pension System (BES)

The President will be authorized to increase the state contribution rate in the private pension system from 30% up to 50%, or to reduce it to zero.

Effective date: On the date of publication

Collection of Social Security Premium Debts through Deductions from Pensions

For individuals receiving income or pensions from the Social Security Institution (SSI), unpaid premiums and related debts will be collected through deductions from their pensions, limited to 25% of the monthly amount.

Effective date: 1 January 2026

2. Proposed Amendments to Tax Legislation

Abolition of the Exemption for Residential Rental Income

The income tax exemption for rental income derived from residential properties will be abolished. However, individuals receiving retirement, widow, orphan, or disability pensions will continue to benefit from the exemption for their residential properties.

Effective date: 1 January 2026

Elimination of Interest Expense Deduction for Property Acquisition Loans

The deduction of interest expenses related to borrowings used to acquire properties (except residential properties) will be abolished.

Effective date: On the date of publication, applicable to income and earnings generated in 2025

Reintroduction of the Fourth Provisional Tax Period

The number of provisional tax periods will be increased from three to four. Accordingly, taxpayers will determine their income or earnings on a quarterly basis for 3-, 6-, 9-, and 12-month periods.

Effective date: On the date of publication, applicable to income and earnings generated in 2025

Restriction of the Tax Exemption for Mutual Funds

The withholding tax exemption applicable to participation shares of mutual funds held for more than one year will be limited to funds that are publicly offered and traded on Borsa İstanbul.

Effective date: On the date of publication

Imposition of One-Fold Tax Loss Penalty for Undeclared Actual Sales Value in Real Estate Transactions

A one-fold tax loss penalty will be imposed in cases where the actual sales price of real estate is underdeclared in title deed transactions.

Effective date: On the date of publication

Introduction of a Proportional Notary Fee for Vehicle Sales and Transfers

For the first registration of new vehicles and for second-hand vehicle sales or transfers, notaries will charge a proportional fee of 0.2% (binde 2) of the sales value, not less than TRY 1,000.

Effective date: Beginning of the month following the publication date

Extension of Annual Fee (Harç) Obligation to Certain Licenses and Authorizations

Licenses and authorizations such as those for jewelry trade, second-hand motor vehicle and real estate trading, private health institutions, and veterinary clinics will be subject to annual fee obligations.

Effective date: 1 January 2026

VAT Exemption for UEFA Organizations

Deliveries of goods and services related to the 2026 UEFA Europa League Final, the 2027 UEFA Conference League Final, and the 2032 UEFA European Football Championship will be exempt from VAT for UEFA and participating entities.

Effective date: On the date of publication

Extension of Non-Recognition of Economic Enterprise Status

The temporary article in the Corporate Tax Law stipulating that certain activities will not constitute an economic enterprise will be extended until 31 December 2035.
Effective date: On the date of publication

Income and Corporate Tax Exemption for UEFA Organizations

UEFA and non-resident participating teams and entities will be exempt from income and corporate taxes on revenues derived from the aforementioned UEFA events.

Effective date: On the date of publication

Extension of the Provision on Invalidity of Early Submission of Post-Dated Cheques

The provision that invalidates the submission of cheques before their issue date will be extended until 31 December 2028.

Effective date: On the date of publication

3. Conclusion and Evaluation

The Draft Omnibus Law is still under consideration by the Turkish Grand National Assembly. Once enacted, it is expected to have a significant impact on employers’ social security costs as well as taxpayers’ overall tax obligations.We are closely monitoring the legislative process, and further details will be shared once the law is enacted and published in the Official Gazette.