How provisional tax is calculated and planned
Advance tax paid on quarterly profit; filing periods, rates for companies and sole proprietors, credit in the annual return and cash planning.
Provisional tax is tax paid in advance on profit earned during the year. It is deducted from the tax calculated in the corporate or income tax return at year end. The aim is to spread tax over the year rather than pay it at once. Provisional tax calculator
Who pays?
Business income earners keeping books on the balance sheet or single-entry basis, self-employed professionals and companies. Simplified-method taxpayers and those with only wage or rental income do not pay provisional tax.
Periods and deadlines
| Period | Months covered | Filing and payment |
|---|---|---|
| 1st | January–March | 17 May |
| 2nd | January–June | 17 August |
| 3rd | January–September | 17 November |
| 4th | — | Not filed; the annual return applies |
Deadlines falling on a weekend move to the next business day; current dates are in the tax calendar.
Rate
- Companies: 25% (corporate tax rate).
- Individuals: income tax brackets on the period's profit (15%–40%).
Provisional tax is cumulative: in the 2nd period tax is calculated on January–June profit and the 1st period payment is deducted.
Example
A limited company's profit: January–March TRY 400,000, January–June TRY 700,000, January–September TRY 1,200,000.
| Period | Cumulative profit | Tax (25%) | Previous payments | Payable |
|---|---|---|---|---|
| 1 | 400,000 | 100,000 | 0 | TRY 100,000 |
| 2 | 700,000 | 175,000 | 100,000 | TRY 75,000 |
| 3 | 1,200,000 | 300,000 | 175,000 | TRY 125,000 |
If annual profit is TRY 1,500,000, corporate tax is TRY 375,000; TRY 300,000 of provisional tax is deducted and TRY 75,000 paid at the end of April. If profit falls, excess provisional tax is refunded or offset. Corporate tax calculator
Planning
- Complete period-end entries: depreciation, FX differences, provisions and inventory valuation should be booked every quarter. Missing entries mean more provisional tax than necessary.
- 10% deviation rule: if the provisional tax base is under-declared by more than a set margin compared with the annual result, a tax loss penalty and late payment interest may apply on the difference. Late payment interest
- Cash: we tell you the size of each payment in the middle of each quarter. Returns