The young entrepreneurship incentive provides tax advantages for young people between the ages of 18 and 29 who are starting a business for the first time. The financial burden on young people entering the workforce is significantly reduced through both tax exemptions and social security premium incentives.
In Türkiye, you must meet certain basic conditions to benefit from this young entrepreneur support. This support allows for an exemption from both income tax and a reduction in the social security burden through a premium incentive. Let’s take a step-by-step look at how you can benefit from these advantages.
Who Can Benefit from the Young Entrepreneur Incentive?
To benefit from the young entrepreneur incentive, all of the following conditions must be met:
- They must have established an income tax liability for the first time in their own name.
- They must have reached the age of 18 and not be older than 29 as of the date the tax liability was established.
- They must be physically performing and managing the business themselves.
- The business must be established as a simple partnership or a sole proprietorship.
How Much is the Tax Exemption and for How Long is it Valid?
Young entrepreneurs are granted an income tax exemption for 3 years. This exemption is valid up to the determined earnings amount for each year.
The upper limit for the young entrepreneur exemption for 2025 is 230,000 TL. No income tax is charged on earnings up to this amount. If your annual profit is below this limit, you will not pay any tax.
Is There a Bağ-Kur Premium Incentive?
Yes, a premium incentive is also applied to young entrepreneurs for 1 year. According to Article 5 of the Social Security and General Health Insurance Law No. 5510, with this incentive, premium payments are covered by the Treasury for 12 months.
Advantages of Young Entrepreneurship
- Exemption from income tax for 3 years
- Bağ-Kur premiums paid by the state for 12 months
- Starting a business with lower costs
- Benefiting from supportive advantages when doing tax planning
Are There Any Disadvantages or Limitations?
The young entrepreneurship incentive can only be utilized once. The same person cannot benefit from this right if they have previously established an income tax liability. Additionally, the exemption does not apply if the company type is a limited or joint-stock company.
The social security premium incentive is limited to only 12 months. After this period, Bağ-Kur premiums must be paid regularly. Furthermore, if the tax liability is established falsely or misleadingly, all incentives will be revoked.
How Does the Application Process Work?
- The tax liability is established through the Interactive Tax Office.
- A request for the exemption is made to the tax office with a petition.
- The letter received from the tax office is taken to the Social Security Institution (SGK) to submit a petition to benefit from the premium incentive.
Getting support from a financial advisor can ensure the process goes smoothly and without errors. Missing documents or incorrect declarations can result in the loss of the incentive.
Conclusion
The young entrepreneurship incentive is a valuable starting opportunity for young people entering the business world. Thanks to the tax exemption and premium incentive, business startup costs are reduced, and a more sustainable business model can be developed. However, it is important to manage the process carefully and act in accordance with the regulations.
