Corporate Tax Drops to 12.5% in 2027: A Preparation Guide for Businesses

Recently, news about "corporate tax rate dropping to 12.5%" has been on the radar, but there is confusion regarding when this reduction will start, who it covers, and what needs to be prepared in advance. In this article, we clarify the current status in 2026, what will change in 2027, and the steps your company needs to take to fully benefit from this advantage.

🚀 Quick Glance

• The rate has not changed in 2026 yet: The 1-percentage-point deduction is still active for production earnings, meaning the effective rate is 24%.

• The discount increases to 12.5 points in 2027: For manufacturing companies with an industrial registry certificate, the rate will drop to 12.5%.

• Not everyone, only companies meeting specific criteria benefit: The deduction is exclusive to companies that document their manufacturing activity.

• Preparation must start in 2026: Document and record deficiencies may lead to the deduction not being applicable in 2027.

What Does This Change Mean?

While the tax deduction rate granted to manufacturing activities in the Corporate Tax Law was only 1 percentage point lower than the general rate (25%) in previous periods, this deduction has been increased to 12.5 percentage points under Law No. 7582. In practice, this means that companies with an industrial registry certificate that actually engage in production will be taxed at a rate of 12.5% on a significant portion of their earnings starting from the 2027 tax period. The general rate of 25% has not changed for any company; what changed is only the scale of the deduction granted for manufacturing activities.

What is the Difference Between 2026 and 2027?

Rates Applicable in the 2026 Period

• General rate: 25%

• Export earnings: 5-point deduction → effective 20%

• Production/manufacturing earnings: 1-point deduction → effective 24%

Rate Applicable Starting from the 2027 Period

• Production earnings with industrial registry certificate: 12.5-point deduction → effective 12.5%

• No changes are foreseen for the export deduction or the general rate.

Who Can Benefit From This Deduction?

Manufacturers holding an industrial registry certificate: The prerequisite for benefiting from the deduction is that the company holds an industrial registry certificate demonstrating that it actually performs manufacturing.

• Companies that document their earnings with manufacturing activity: Holding the certificate is not enough; companies that can show through accounting records that their income is genuinely derived from manufacturing activities can benefit.

• Companies that accurately separate their revenue: Companies that have income from both manufacturing and non-manufacturing activities can benefit from this advantage only if they calculate the eligible manufacturing earnings separately.

How Should You Prepare for 2027?

1. Check your industrial registry certificate status. If you do not have a certificate or if it is not up-to-date, complete the application process within 2026.

2. Track your manufacturing and other business revenues separately. Organize your accounting records accordingly so that the earnings eligible for the deduction can be clearly segregated.

3. Discuss 2027 planning with your CPA now. There may be differences in tax base calculations and advance corporate tax returns during the transition period.

4. Follow new communiqués and secondary regulations. The implementation details of Law No. 7582 are clarified by communiqués published by the Revenue Administration.

Conclusion: What You Need to Do

• Remember that the current rates (24% in production) are still applicable in 2026.

• Complete or update your industrial registry certificate within 2026.

• Get ready for 2027 by bookkeeping your manufacturing revenues separately.

• Monitor developments regularly; secondary legislation may change the application details of the deduction.

📌 Automate Calculations with Üstad

To compare your tax burden based on current and future period rates, you can use the Üstad Corporate Tax Calculation tool and project your 2026 and 2027 scenarios in advance.

❓ Frequently Asked Questions

1. When does the corporate tax deduction drop to 12.5%?

The deduction comes into effect starting from the 2027 tax period. In 2026, the current rates (1-point deduction in production, effective 24%) are still applicable.

2. Who can benefit from this deduction?

Companies that hold an industrial registry certificate and actually carry out manufacturing activities can benefit. Companies that only export or engage in non-production activities are not included in this deduction.

3. What is the current corporate tax rate in 2026?

The general rate is 25%. A 1-point deduction is applied to manufacturing earnings making it 24%, and a 5-point deduction is applied to export earnings making it 20%.

4. Has the special 9% rate for manufacturer-exporters come into effect?

No. Although this proposal was included in the initial draft bill, it was removed from the text during parliamentary committee discussions and did not become law.

5. What should I do to prepare my company for 2027?

Keep your industrial registry certificate up-to-date, account for your manufacturing revenues separately, and evaluate the 2027 tax base planning with your CPA within 2026.