Young Entrepreneur Tax Exemption, Social Security Support, VAT Benefits, KOSGEB Grants and Export Incentives

Turkey offers several incentives and tax advantages for individuals starting a new business.
This guide outlines all major incentives available to entrepreneurs as of 2025.

1) Young Entrepreneur Income Tax Exemption

For entrepreneurs aged 18–29.

Benefits:

• 0% income tax on the first 75,000 TL for 3 years

• Applies to first-time business owners

• Valid for sole proprietorships and partnerships

One of the strongest tax incentives in Turkey.

2) Social Security (Bağkur) Support for Young Entrepreneurs

Government pays the entrepreneur’s Bağkur premiums for 12 months.

2025 monthly Bağkur cost: approx. 4,500 TL
Annual saving: about 54,000 TL

3) VAT Exemptions

In certain industries, VAT is reduced or entirely removed.

Examples:

• Software exports → 0% VAT

• General service exports → 0% VAT

• Some goods and agricultural categories → 1–10% VAT

Exporting services such as software, hosting, design and consulting brings major VAT advantages.

4) Withholding (Stopaj) Tax Incentives

In specific regions:

• Wage withholding reductions

• Employer SGK support

• Regional tax incentives

Organized industrial zones offer stronger benefits.

5) KOSGEB Support Programs (2025)

a) Entrepreneurship Support Program

• 65,000 TL grant

• 360,000 TL repayable support

• Training required

b) R&D and Advanced Entrepreneurship Support

• Up to 300,000 TL in grants

• Suitable for software, technology, cloud and game companies

6) Export Tax Advantages

For companies exporting software or services:

• 50% corporate tax reduction

• Additional incentives for foreign currency earnings

• Full VAT exemption

Corporate tax can effectively drop from 20% to 10%.

7) Technopark and R&D Center Advantages

Companies operating inside Technoparks get:

• 100% exemption on income/corporate tax for software & R&D revenue

• Employee tax reductions

• VAT exemptions for qualifying activities

A major cost advantage for tech startups.

8) Banking and Financial Advantages for New Companies

Banks offer special entrepreneur packages including:

• Reduced POS commissions

• Low-interest business loans

• KOSGEB-backed loan programs

• Interest-free regional loans

9) Which Company Type Is Better for Incentives?

Short answer:

Sole proprietorship is advantageous at the beginning, limited company is advantageous for scaling.

10) Conclusion

Turkey provides strong financial and tax incentives for new entrepreneurs.
Key advantages include:

• Young entrepreneur exemption

• Bağkur support

• VAT advantages

• Export incentives

• KOSGEB grants

• Technopark exemptions

Using these incentives effectively improves financial sustainability in the first years of a business.