The guide outlines sponsorship expenses, eligible areas, agreement essentials, distinctions from advertising, documentation, tax deductions, professional versus amateur sports, and VAT applications.
Turkey’s Revenue Administration announced the publication of Guide to the Taxation of Sponsorship Expenditures on 27 August 2025, which provides clarification on the taxation of sports-related sponsorships for athletes, clubs, and other entities.
The guide explains that sponsorship expenses are payments made to support events, organisations, or individuals in exchange for promotional or goodwill benefits. Sponsorship can cover areas such as sports, culture, social activities, and educational initiatives.
Sponsorship refers to providing cash or in-kind support in exchange for communication opportunities, either to achieve indirect commercial benefits or to fulfil social responsibility in areas eligible for sponsorship.
The guide also mentions that agreements should clearly define the parties, purpose, scope, duration, rights, and obligations. Unlike advertising, sponsorship emphasises support rather than direct promotion. Additionally, proper documentation is required to validate expenses, which may be deductible for income or corporate tax purposes if they meet legal criteria.
The guide emphasises the distinction between sponsorship and advertising expenditures. Sponsorship expenditures are generally 100% deductible for amateur sports and 50% deductible for professional sports, applicable to both corporate and individual income taxes. However, advertising expenditures, which must directly relate to acquiring and maintaining commercial income, are fully deductible under general tax rules.
Lastly, the guide also distinguishes between professional and amateur sports for sponsorship purposes and outlines the applicable VAT treatment on such expenses. Advertising is always subject to VAT. Sponsorships, however, are subject to varying VAT treatments. Supplies of goods or services to public institutions are VAT-exempt when provided free of charge, while other sponsorship-related supplies are generally subject to VAT. Cash sponsorships are typically VAT-exempt as they fall outside the scope of VAT.
