Inflation adjustment: who does it and where does it stand in 2026?
The logic of inflation adjustment under the Tax Procedure Law, its application in 2023 and 2024, the 2025–2027 ban introduced by Law No. 7571 and the revaluation option.
Inflation makes historical costs on the balance sheet impossible to compare with today's money. For this reason, after 2023 companies adjusted their tax balance sheets for inflation for two years. From 2025, the rule changed.
What was inflation adjustment?
Under repeated article 298 of the Tax Procedure Law, when increases in price indices exceed certain thresholds, taxpayers keeping balance-sheet books subject their financial statements to inflation adjustment. Non-monetary items (fixed assets, inventory, equity items) are updated with the index; the resulting difference is recorded as prior years' profit/loss or an inflation adjustment difference.
- The 31.12.2023 balance sheet was adjusted with the effect going to prior years' profit and loss.
- The 2024 accounting period, together with its provisional tax periods, was subject to adjustment.
2025–2027: no adjustment
Law No. 7571, published in the Official Gazette of 25 December 2025, added provisional article 37 to the Tax Procedure Law. Under it:
| Period | Inflation adjustment |
|---|---|
| 2025 accounting period (including provisional tax periods) | Not made |
| 2026 accounting period (including provisional tax periods) | Not made |
| 2027 accounting period (including provisional tax periods) | Not made |
The ban applies regardless of whether the conditions in repeated article 298 are met. For those with special accounting periods, the periods ending in 2026, 2027 and 2028 are covered. The President can extend this period by up to three accounting periods. The rule may have different consequences for certain groups of taxpayers listed in the Law; the implementation principles are set by the Ministry of Treasury and Finance.
The revaluation option
Periods in which no inflation adjustment is made count, in the Law's words, as periods in which the adjustment conditions are not met. In that case the revaluation option in paragraph (Ç) of repeated article 298 comes into play: depreciable assets and their accumulated depreciation can be updated with the announced revaluation rate.
- Revaluation is optional.
- Depreciation on the updated value is expensed; this partly compensates for depreciation that stays low because of outdated costs.
- Rate and rough calculation: Revaluation rate · Depreciation
The commercial balance sheet
This ban concerns records kept under tax legislation. In financial statements that companies subject to independent audit prepare under TFRS, the financial reporting standard for hyperinflationary economies (TAS 29) is assessed separately; differences between the two sets of statements are taken into account in the deferred tax calculation.
What it means for your company
- No adjustment entries are made in the 2025, 2026 and 2027 provisional and corporate tax calculations.
- The amounts adjusted as at the end of 2024 are the opening values for later periods.
- For companies with large depreciable assets, the tax effect of revaluation should be calculated.
- Effects on the corporate tax calculation: Corporate tax return
Legal basis: Tax Procedure Law No. 213 repeated art. 298 and provisional art. 37; Law No. 7571 (Official Gazette 25.12.2025, No. 33118).