According to Article 10-1/ğ of the Corporate Tax Law, companies that provide services to non-residents, such as health services, can deduct 80% of the income earned from these services from their corporate tax base, provided the income is fully transferred to Türkiye and invoiced to foreign clients. However, for the remaining 20% of the income not eligible for this exemption, the company questioned whether it could benefit from a reduced corporate tax rate, similar to what is applied to export-based earnings under Article 32.
The ruling clarifies that health services provided to foreign residents in Türkiye do not qualify as “service exports” under the Corporate Tax Law, and therefore, the 5-point tax reduction for export earnings cannot be applied to the 20% non-exempt income. Thus, the company cannot apply the reduced corporate tax rate to this portion of its earnings.
Source: Revenue Administration
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