REVALUATION RATE FOR THE THIRD PROVISIONAL TAX PERIOD OF 2026 SET AT 19.64%
Under Corporate Income Tax Circular No. KVK-74 / 2026-4 / Investment Allowance-60, issued by the Turkish Revenue Administration on 30 October 2026, the revaluation rate applicable for the third provisional tax period of 2026 has been set at 19.64% pursuant to paragraph (B) of Repeated Article 298 of the Tax Procedure Law. The rate is particularly relevant to revaluation of depreciable assets and to provisional-tax calculations concerning investment allowance and investment contribution amounts.
What Does This Rate Represent?
The 19.64% rate is a period-specific revaluation rate determined for the third provisional tax period of 2026. It is used where tax legislation requires a revaluation rate for provisional-tax-period calculations under Repeated Article 298 of the Tax Procedure Law. It should not be confused with the annual revaluation rate for 2026.
Revaluation of Depreciable Assets
Under Repeated Article 298/Ç of the Tax Procedure Law, qualifying fully liable income and corporate taxpayers keeping books on the balance-sheet basis may revalue depreciable assets included in their balance sheets, together with the related accumulated depreciation, for periods in which the conditions for inflation adjustment are not met. Provisional Article 37, added to the Tax Procedure Law by Law No. 7571, provides that, for taxpayers within its scope, inflation adjustment will not be applied for the 2025 accounting period and for the 2026 and 2027 accounting periods, including provisional tax periods; those periods are also deemed periods in which the inflation-adjustment conditions are not met for purposes of Article 298/Ç. Accordingly, taxpayers satisfying the other conditions of Article 298/Ç may apply revaluation in 2026. For revaluations made as of provisional tax periods, the rate announced for the relevant period applies; therefore, the 19.64% rate is relevant for the third provisional tax period of 2026. Revaluation may increase both the carrying amount and the depreciation base of the assets and may therefore affect depreciation expense and taxable income in subsequent periods.
Reduced Corporate Income Tax and Investment Contribution Amounts
Under Article 32/A of the Corporate Income Tax Law, following completion of an investment, the unused balance of the investment contribution amount may be increased in subsequent years by the revaluation rate determined under the Tax Procedure Law. In addition, for expansion investments where the income eligible for reduced corporate income tax is determined through a ratio, the carrying values of fixed assets are taken into account at their revalued amounts. Accordingly, taxpayers benefiting from investment incentives should review their remaining investment contribution balances and relevant fixed-asset values in connection with the third provisional tax period.
Carried-forward Investment Allowance Amounts
The revaluation rate may also remain relevant for taxpayers that still have investment allowance rights falling within Provisional Article 69 of the Income Tax Law. Under the applicable legacy provisions, carried-forward investment allowance amounts may be increased by reference to the revaluation rate; therefore, the 19.64% rate is relevant to the third provisional tax period calculations of taxpayers that remain within this regime.
It Is Not the Rate Used to Update 2027 Tax Thresholds
The announced 19.64% rate does not directly determine the income tax brackets, monetary thresholds and penalties under the Tax Procedure Law, fees, stamp tax amounts or motor vehicle tax amounts to be applied in 2027. The annual revaluation rate for 2026, which is used as the statutory reference for such annual adjustments, is determined separately on the basis of the increase in the Domestic Producer Price Index as of October, calculated using twelve-month averages compared with the same period of the previous year, and is announced in the Official Gazette. Statutory powers granted to the President to increase or reduce certain amounts may also apply separately.
Points to Consider in Practice
Before finalising third provisional tax calculations, companies should review whether they will apply revaluation under Repeated Article 298/Ç, identify the qualifying depreciable assets and verify accumulated depreciation records. Taxpayers with investment incentive certificates should also reconcile remaining investment contribution balances and any carried-forward investment allowance rights. The filing and payment deadline for income and corporate provisional tax returns for the third provisional tax period of 2026 is 17 November 2026. Given the period-specific nature of the 19.64% rate, it should not be used to calculate 2027 thresholds and amounts that depend on the annual revaluation rate.
