Turkey Prepares Lower-Than-Expected Tax and Fee Hikes for 2026

Turkey has officially announced the 2026 revaluation rate at 25.49%, a figure published in the Official Gazette and used traditionally to update a broad set of taxes, administrative fees, fines, and exemption thresholds. However, this year’s fiscal roadmap comes with a significant policy shift: the Ministry of Treasury and Finance is preparing to raise certain taxes and fees at a rate below the official revaluation percentage, aligning increases with next year’s inflation targets rather than applying the full statutory rate.

The announcement arrived through the General Communiqué issued by the Revenue Administration, setting the baseline for upcoming adjustments. Immediately afterward, Treasury and Finance Minister Mehmet Şimşek clarified the government’s stance, emphasizing that using the full revaluation rate for every tax category is neither mandatory nor desirable.

A Strategic Policy Move Centered on Inflation Targets

Minister Şimşek explained that the revaluation rate plays a technical role in Turkish tax law: it does not simply raise taxes but also updates exemption thresholds, tax brackets, and numerous limits designed to protect taxpayers from inflation. According to him, the ministry’s priority is ensuring a balanced fiscal transition into 2026.

He underscored this approach by stating:
“We are continuing our work to increase taxes and fees at a lower rate than the revaluation rate by taking inflation targets into account.”

This signals a deliberate effort to soften the impact on citizens and businesses, even as inflation remains a central policy concern.

Not Just Higher Taxes: Many Thresholds Rise with the Revaluation Rate

While the government prepares to keep specific tax increases below 25.49%, Şimşek stressed that the income tax tariff and many tax exemptions will be fully updated at the revaluation rate, ensuring these thresholds keep pace with inflation.

In his words:
“The income tax tariff will be updated at a rate of 25.49%. We will not introduce any regulation that would disadvantage our citizens.”

He added that exemption amounts used by millions of taxpayers — including meal allowances, transportation support, disability-related income tax reductions, rent income exemptions, capital gains exemptions, and irregular income exemptions — will also rise exactly at the revaluation rate.

This means that while some taxes may increase more gradually, taxpayer protections and allowances expand fully, providing relief against inflation-related bracket creep.

Key Areas That Will Change in 2026

With the revaluation rate now official, a wide array of tax-related items will undergo adjustments starting January 1, 2026. These include:

• Income tax brackets

• Exemption thresholds used by employees and self-employed individuals

• Rent income exemption and declaration thresholds

• Capital gains tax calculation limits for real estate sold within 5 years

• Meal expense exemptions and invoice limits

• Depreciation (amortization) thresholds for businesses

• Motor Vehicle Tax (MTV)

• Property tax obligations

• IMEI registration fees

• Overseas travel fees (yurt dışı çıkış harcı)

• Inheritance and gift tax exemption limits

• Small tradesmen exemption limits and simplified taxation thresholds

Each of these categories will be shaped by the new revaluation rate, leading to a broad fiscal recalibration for households, companies, and investors.

What This Means for Citizens and Businesses

The government’s two-layer strategy — applying the full revaluation rate to exemptions while applying a lower rate to certain taxes and administrative fees — creates a mixed but taxpayer-friendly policy landscape for 2026.

On one hand, households benefit directly from higher tax exemptions, which help offset inflation’s impact. On the other hand, reduced fee increases and specific tax increases help prevent excessive financial strain at the start of the year.