Young entrepreneur income exemption 2026: TRY 400,000, conditions and common mistakes
A TRY 400,000 annual income exemption for three years for entrepreneurs under 29 who become taxpayers for the first time; who qualifies, who does not, and why the Bağ-Kur support ended.
Repeated article 20 of the Income Tax Law exempts part of the profit of young entrepreneurs starting a business for the first time, for three years. The annual exemption for 2026 is TRY 400,000 (TRY 330,000 in 2025).
Who qualifies?
Individuals who are full taxpayers in Türkiye and who:
- Become income taxpayers for the first time because of business, agricultural or professional activity,
- Are under 29 on the start date,
- Notify the start of business on time,
- Do the work themselves or manage it.
In an ordinary or general partnership, all partners must meet the conditions.
Who does not?
- Partners of limited and joint stock companies (the company pays corporate tax),
- Those previously registered for business, agricultural or professional income,
- Those joining an existing business as a partner,
- Those taking over a business from a spouse or relatives up to the third degree (except on death),
- Businesses actually run by someone else.
Being insured elsewhere, working digitally or employing staff is not by itself an obstacle.
How it applies
- The exemption applies to profit, not turnover. Example: TRY 1,000,000 revenue, TRY 550,000 expenses → TRY 450,000 profit; TRY 400,000 exempt, TRY 50,000 taxed. Income tax calculator
- The period is three tax years including the year of start. A business opened in December counts the first year as one year even if it lasts a few weeks; plan the start date.
- No separate certificate is needed; the exemption is shown in the annual return. It can also be taken into account in provisional tax periods.
- VAT, withholding, e-document and bookkeeping obligations continue as normal.
Bağ-Kur support has ended
Young entrepreneurs' Bağ-Kur premiums used to be paid by the Treasury for one year. This support ended from 1 January 2026; the tax exemption continues. 2026 Bağ-Kur amounts: Bağ-Kur premiums 2026.
Common mistakes
- Thinking the exemption ends on turning 29 (age on the start date is what counts).
- Forgetting a previous registration, however short.
- Applying the exemption to turnover.
- Expecting the exemption after forming a limited company.
Sole proprietorship or company? Sole proprietorship or limited company?
Sources: Income Tax Law No. 193 repeated art. 20; Income Tax General Communiqué No. 332 (2026 amount); Law No. 5510 additional article on young entrepreneur premium support and its 2026 amendment.