Turkey updated population thresholds for simple method taxation, extending exemptions for small settlements under Presidential Decision No. 10679.
The Turkish government has revised exemptions under the upcoming individual income tax (IIT) real taxation regime through Presidential Decision No. 10679, published on 11 December 2025. The change updates population thresholds for settlements that were previously covered by Presidential Decision No. 10380.
Under the earlier 2025 decision, businesses in districts within metropolitan municipalities had to switch to the real method of taxation from 1 January 2026, while districts with populations up to 30,000 were exempt. The new decree extends exemptions to settlements that lost municipal status under the Metropolitan Municipality Law and Law No. 6360 and are now classified as neighbourhoods, provided their population does not exceed 2,000. Urban passenger transport operators remain subject to mandatory real taxation.
The revision follows feedback from small settlements reclassified as neighbourhoods, which often lack the infrastructure and administrative capacity to comply with the record-keeping, invoicing, and electronic documentation required under real method taxation.
The revised exemption continues to apply to businesses in manufacturing, trade, construction, vehicle repair, restaurant services, and entertainment.
These changes will take effect on 1 January 2026.
Earlier, the Turkish government issued Presidential Decision No. 10380, published in the Official Gazette on 9 September 2025, introducing changes to business taxation under the Individual Income Tax Law.
