What is Prepaid Corporate Tax?
Advance tax is a tax practice that allows businesses to pay the income or corporate tax they will owe at the end of the year in advance, in 3-month periods throughout the year. Thanks to this system, the tax burden is calculated and paid periodically instead of being left to the end of the year. With the advance tax calculator, you can enter your income and expense details to easily calculate the advance tax amount to be paid for each period.
How to Calculate Corporate Quarterly Tax?
When calculating advance tax, the expenses are deducted from the income earned during the relevant period to determine the tax base. Then, the advance tax payable is calculated by applying the income tax or corporate tax rate to this amount.
The advance tax calculation process generally follows these steps:
Total income within the period is calculated
Operating expenses are deducted
Tax base is determined
Applicable tax rate is applied
For income tax payers, the income tax tariff is based upon when calculating advance tax. The income tax rates and brackets for the year 2026 are as follows:
Up to 190,000 TL: 15%
Between 190,000 TL – 430,000 TL: 20%
Between 430,000 TL – 3,000,000 TL: 27%
Between 3,000,000 TL – 10,000,000 TL: 35%
Over 10,000,000 TL: 40%
For corporate tax payers, a 25% corporate tax rate is generally applied when calculating advance tax. This tax calculated during the period is offset against the corporate tax return to be submitted at the end of the year.
What are the quarterly tax periods?
In Turkey, the temporary tax return is filed in quarterly periods during the year. These periods are as follows:
1st period: January – February – March
2nd period: April – May – June
3rd period: July – August – September
No temporary tax is calculated for the last three months of the year. Earnings for this period are declared directly within the annual income tax or corporate tax return.
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Frequently Asked Questions
Who is liable for advance tax?
Quarterly tax (advance tax) is paid by corporate tax payers and income tax payers with business income.
How many times a year is the advance tax paid?
Estimated tax is paid 3 times a year. Each payment is calculated based on quarterly earnings.
What is the difference between advance tax and annual tax?
Estimated tax is paid periodically throughout the year, whereas annual tax refers to the finalized tax liability determined by the tax return filed at the end of the fiscal year.
Why is estimating your interim tax crucial?
Accurately calculating temporary tax helps ensure year-end tax liabilities are correctly determined, enabling sound tax planning.