Turkish real estate and venture capital funds have tax advantages written into law. This guide explains which advantage applies in which situation and what to watch out for.
| Advantage | REIF / project REIF | GSYF | Legal basis |
|---|---|---|---|
| Fund income exempt from corporate tax | Yes – at least 50% of real estate income must be distributed (from 1 Jan 2025) | Yes – no distribution rule | CTL 5/1-d, Law No. 7524 |
| Withholding on gains from units held over 2 years | 0% | 0% | ITL Provisional 67, Decree 11107 |
| Deduction of up to 10% of profit | No | Yes | TPL 325/A, CTL 10/1-g, ITL 89/14 |
| Dividend exemption for companies | Per regulations | Yes | CTL 5/1-a-3 |
A company paying corporate tax can set aside up to 10% of declared profit as a "venture capital reserve" and deduct it from taxable income. Conditions: the total reserve cannot exceed 20% of equity and the amount must be invested in a GSYF or GSYO by the end of the same year. If units are sold, the amount must be reinvested within six months.
Part of the tax bill is redirected into venture investments aligned with the company's strategy. Worked example: VC fund tax benefits
Placing income-producing property in a REIF makes rent and capital growth exempt from corporate tax at fund level, provided at least half of the real estate income is distributed. Family members own fund units instead of property; units are easier to transfer within the family, and gains on units held over two years carry 0% withholding.
Transferring property to the fund may trigger title deed fees, VAT and transfer gains tax. These costs should be modelled against the fund's savings over the years. What is a REIF?
Developing a project inside a project REIF keeps development profit within the fund-level exemption and lets investors join a regulated structure. Taxes on contributing land and on unit sales should be modelled project by project. What is a project REIF?
Two full years of holding for 0% withholding; year-end investment and the six-month reinvestment window for the venture capital reserve.
Real estate funds that do not distribute at least 50% of real estate income can lose the exemption. GSYFs are not subject to this rule.
The fund must have a real investment and management purpose; transactions designed only for tax raise audit risk.
Results depend on the balance sheet, ownership structure and goals; confirm with a certified tax adviser before acting.
FT Portföy models fund structures and their tax effect with tax advisers for companies, families and foreign investors. Türkçe
Yes. The advantages described here are written into the Corporate Tax Law, the Tax Procedure Law and a Presidential Decree. What matters is meeting the conditions and deadlines and having a genuine investment purpose.
Individuals who qualify as qualified investors can buy REIF or GSYF units; gains on units held over two years carry 0% withholding.
No. The Tax Procedure Law 325/A deduction applies only to investments in GSYFs and GSYOs.
Depending on how the transfer is made and the property's status, title deed fees, VAT and transfer gains tax may arise. Each item should be calculated at the design stage.
Withholding and fund-level treatment apply to the fund and its units; a foreign investor's home-country tax also matters, so check with your own tax adviser.
Related guides: VC fund tax benefits · What is a GSYF? · What is a REIF? · Asset management in Turkey
This page is general information, not an investment offer or investment, tax or legal advice. Tax law can change; please confirm your own position with a tax adviser. Fund units carry risk and their value may go up or down; past performance is not a guarantee of future results.
Sources: KPMG Vergi · Presidential Decree 11107 (Official Gazette 27.03.2026) · Law No. 7524 commentary.
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