Challenges

Income tax exemption for young entrepreneurs is regulated in the Article 20bis of the Income Tax Law No. 193. Pursuant to the mentioned article, fully responsible real persons, who have income tax liability established for the first time due to their commercial, agricultural or self employment activity and who have not completed twenty-nine years of age as of the liability commencement date, shall be exempt from income tax, for the portion of up to in the second tax bracket of the tariff written in Article 103 of the earnings they generated throughout three taxation periods as of the calendar year they started operating. (150.000 TL for the year 2023).

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Description of Innovation

Conditions required for benefiting from Income tax exemption for young entrepreneurs:

1. The entrepreneur must have notified the commencement of work within the legal period.
2. Entrepreneur should actively be on job and run his business (Employing apprentice, journeyman/journeywoman and worker or journey, illness, fulfilling military duty, imprisonment or conviction shall not regarded as violation of this condition)
3. If the activity is carried out within the body of an ordinary partnership or a sole proprietorship, all partners must meet the conditions of this article as of the date of commencement of work.
4. Enterprise shouldn’t be taken over from up to third degree and third degree blood relatives and relatives-in-law (excluding taking over of enterprise by spouse and children)
5. Entrepreneur shouldn’t become partner of an existing enterprise or activity afterward. Income tax exemption for young entrepreneurs who have not completed twenty-nine years of age

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