Amendment for Taxation under the Simple Method

The most recent amendment aimed at simplifying tax procedures is a standardization measure designed to establish uniform application across metropolitan municipalities, as stipulated by the Presidential Decree dated 9 September 2025. Previously, purchases and sales of goods as well as hotel and restaurant activities were excluded from the simplified tax regime in 13 metropolitan municipalities. The new regulation extends this exclusion to the remaining 17 metropolitan municipalities, thereby establishing equality across all 30 metropolitan municipalities.

As of 1 January 2026, taxi, dolmuş, minibus, and bus operators in urban passenger transport will be subject to the actual tax procedure. The amendment is intended to strengthen tax fairness and reduce informal economic activity.

Scope and Content of the Amendment

The framework for taxation under the simplified procedure has been redefined by the Presidential Decree published in the Official Gazette on 9 September 2025, titled “Presidential Decree on Taxpayers Determining Their Commercial Income Under the Simplified Procedure in Accordance with the Provisions of Income Tax Law No. 193.” This regulation is a standardization measure aimed at achieving uniform application across metropolitan municipalities. By excluding certain activities—such as goods trading and hotel and restaurant operations—from the simplified tax regime in the remaining 17 metropolitan municipalities, equality has now been established across all 30 metropolitan municipalities. These activities serve as key examples of the standardization effort.

As of 1 January 2026, the taxation method for taxi, dolmuş, minibus, and bus operators in urban passenger transport has been brought under the actual tax procedure. This change is based on the principle of evaluating sector-specific financial elements together with the annual revenue threshold of 480,000 Turkish lira under the simplified procedure. It is assumed that items such as license plate fees and monthly rental payments significantly increase the economic scale of these activities, justifying their exclusion from the simplified regime. Consequently, the goal is to ensure that transportation activities of similar scale and nature are taxed under the same procedure in all metropolitan municipalities.

An exceptional provision has been made for districts within metropolitan municipalities with populations below 30,000. Taxpayers engaged in urban transport and other small traders qualifying for the simplified regime may continue to benefit from it if they meet legal requirements. The amendment is designed as a tool consistent with the objectives of strengthening tax fairness and reducing informal economic activity. The structural feature of the system, whereby taxpayers under the simplified regime are exempt from income tax and are not required to file annual income tax returns, remains unchanged. The regulation will enter into force as of 1 January 2026.

Explanations Regarding the New Procedure

The Presidential Decree has announced that traders and artisans taxed under the simplified procedure will be transitioned to the actual tax procedure as of 2026. Consequently, with the termination of simplified tax status, they will be required to maintain accounting records and submit tax returns. Items such as VAT, provisional tax, and withholding tax will apply to many small traders for the first time.

Bendevi Palandöken, General President of the Confederation of Turkish Tradesmen and Artisans (TESK), stated that the new regulation could impose heavy financial and administrative burdens on millions of small traders who rely on limited income for their livelihood. Palandöken emphasized that traders under the simplified regime are barely able to sustain their businesses with modest earnings, and the increased obligations under the actual procedure may lead to business closures.

Also from TESK, Palandöken highlighted that the transition to the actual procedure mandates the use of digital tools such as e-invoicing and e-ledgers, yet a large portion of traders lack access to this infrastructure. It was noted that elderly traders or those lacking digital literacy will face significant difficulties during this transition, and some may be forced to cease operations if they cannot adapt to the technological change.

TESK’s Request for an Extension

TESK President Bendevi Palandöken stated that at least a three-year period is necessary to establish the required infrastructure for the new procedure. To date, no response has been provided by official state institutions, including the Presidency, to this request. If the request is not accepted, the new procedure will enter into force on the date originally determined.