Accounting Standards & Financial Reporting in Turkey: A Complete Guide for Foreign Companies
Every foreign-owned company operating in Turkey must comply with Turkish accounting and financial reporting regulations. From maintaining statutory books in Turkish to filing annual financial statements, the requirements can be complex - especially for investors accustomed to different frameworks. This guide breaks down everything you need to know about accounting standards, audit obligations, and financial reporting compliance in Türkiye.
Turkey’s Accounting Framework at a Glance
Turkey has progressively aligned its accounting standards with international norms. The country’s financial reporting landscape is shaped by two parallel frameworks:
- Turkish Financial Reporting Standards (TFRS) - the full IFRS-equivalent standards
- BOBİ FRS (Büyük ve Orta Boy İşletmeler için Finansal Raporlama Standardı) - a simplified standard for large and medium-sized entities not subject to full TFRS
Which Framework Applies to Your Company?
The applicable framework depends on your company’s classification:
Full TFRS (IFRS-equivalent) is mandatory for:
- Companies listed on Borsa İstanbul (BIST)
- Banks and financial institutions regulated by BDDK
- Insurance companies regulated by SEDDK
- Investment funds and portfolio management companies
- Companies designated as Public Interest Entities (PIEs)
BOBİ FRS applies to:
- Large and medium-sized companies subject to independent audit but not classified as PIEs
- This includes many foreign-owned subsidiaries operating in Turkey
Turkish Uniform Chart of Accounts (Tekdüzen Hesap Planı) applies to:
- Small companies not subject to independent audit
- Used for statutory tax reporting by all companies
Key Insight: Even if your company prepares group-level consolidated reports under IFRS, you must still maintain statutory books and file financial statements in accordance with Turkish regulations.
The Regulatory Bodies
Understanding who regulates financial reporting in Turkey is crucial:
KGK (Kamu Gözetimi Muhasebe ve Denetim Standartları Kurumu)
The Public Oversight, Accounting and Auditing Standards Authority is the primary regulator. KGK is responsible for:
- Setting Turkish accounting and auditing standards
- Translating and adopting IFRS standards as TFRS
- Licensing independent audit firms and auditors
- Overseeing audit quality
GİB (Gelir İdaresi Başkanlığı)
The Revenue Administration oversees tax-related accounting obligations, including:
- Tax return filing and compliance
- E-invoicing (e-Fatura) and e-ledger (e-Defter) requirements
- Transfer pricing documentation
Other Relevant Bodies
- SPK (Capital Markets Board) - additional requirements for publicly traded companies
- BDDK (Banking Regulation and Supervision Agency) - for banking and finance sector
- Trade Registry - filing of annual financial statements
Statutory Bookkeeping Requirements
All companies in Turkey, including foreign-owned entities, must maintain specific statutory books and records.
Mandatory Books
1. Journal Book (Yevmiye Defteri)
- Records all financial transactions chronologically
- Must be maintained in Turkish
- Entries must be supported by proper documentation
2. General Ledger (Defteri Kebir)
- Systematic classification of all journal entries by account
- Must follow the Turkish Uniform Chart of Accounts
3. Inventory Book (Envanter Defteri)
- Annual inventory of all assets and liabilities
- Must be prepared at the end of each fiscal year
4. Share Ledger (Pay Defteri) - for Joint Stock Companies (AŞ)
- Records all shareholders and share transfers
5. Board Resolution Book (Yönetim Kurulu Karar Defteri) - for AŞ
- Records all board meeting minutes and resolutions
6. General Assembly Resolution Book (Genel Kurul Toplantı ve Müzakere Defteri)
- Records all shareholder meeting minutes
Important Rules
- All statutory books must be maintained in Turkish and in Turkish Lira (TRY)
- Books must be notarized (tasdik) before the start of each fiscal year (typically by December 31)
- Electronic bookkeeping (e-Defter) is mandatory for companies meeting certain revenue thresholds
- Records must be retained for a minimum of 10 years under the Turkish Commercial Code
Financial Statements: What You Must Prepare
Statutory Financial Statements
Every Turkish company must prepare the following at the end of each fiscal year (January 1 - December 31):
- Balance Sheet (Bilanço) - statement of financial position
- Income Statement (Gelir Tablosu) - statement of comprehensive income
- Statement of Cash Flows (Nakit Akış Tablosu) - required for audited companies
- Statement of Changes in Equity (Özkaynak Değişim Tablosu) - required for audited companies
- Notes to the Financial Statements (Dipnotlar) - detailed disclosures
Filing Requirements
Financial statements must be filed with multiple authorities:
- Trade Registry Gazette - annual financial statements must be deposited after the general assembly meeting (within 3 months of fiscal year-end)
- GİB (Tax Authority) - corporate tax return with financial statements by April 30
- KAP (Public Disclosure Platform) - for listed companies only
- KGK - submission of audited financial statements (if applicable)
Key Deadlines
- March 31 - Deadline for preparing annual financial statements
- March 31 - General assembly meeting deadline (for the prior fiscal year)
- April 30 - Corporate tax return filing deadline
- By end of month following the quarter - Quarterly advance tax (geçici vergi) declarations
Independent Audit Requirements
Not all companies in Turkey are subject to mandatory independent audit. The criteria are updated annually by the Council of Ministers.
Who Must Be Audited?
As of 2026, mandatory independent audit applies to companies meeting at least two of three thresholds:
- Total assets: TRY 150 million or more
- Annual net revenue: TRY 300 million or more
- Average number of employees: 150 or more
Note: These thresholds are updated periodically. Certain sectors (banking, insurance, capital markets) have separate and lower thresholds.
Special Cases for Foreign-Owned Companies
Foreign-owned companies may also be subject to audit if:
- They are subsidiaries of foreign public interest entities
- Their parent company requires audited local financials for group consolidation
- They operate in regulated sectors (finance, insurance, energy)
Types of Audit
- Full audit - required for PIEs and larger entities
- Limited review - interim reporting for publicly traded companies
- Voluntary audit - any company can opt for voluntary independent audit
Choosing an Auditor
- The auditor must be a KGK-licensed independent audit firm
- Big Four firms (Deloitte, EY, KPMG, PwC) all operate in Turkey
- Mid-tier Turkish audit firms are also available and often more cost-effective
- The auditor is appointed by the general assembly for a maximum of 7 consecutive years (rotation requirement)
E-Accounting Obligations
Turkey has been a pioneer in digital tax and accounting infrastructure. Foreign companies must comply with several e-accounting requirements:
E-Fatura (Electronic Invoice)
- Mandatory for companies exceeding gross revenue thresholds (updated annually)
- All B2B invoices must be issued electronically through the GİB portal or an integration partner
- Both seller and buyer must be registered in the e-Fatura system
E-Arşiv Fatura (Electronic Archive Invoice)
- Used for invoices issued to recipients not registered in the e-Fatura system
- Mandatory for all e-Fatura users
- Also applies to B2C transactions above certain thresholds
E-Defter (Electronic Ledger)
- Electronic maintenance of journal and general ledger books
- Mandatory for e-Fatura users
- Books are signed with digital certificates and submitted monthly to GİB
E-İrsaliye (Electronic Waybill)
- Electronic delivery notes for goods in transit
- Mandatory for e-Fatura users
Practical Tip: Work with a local accounting firm or ERP provider to ensure seamless integration with GİB’s electronic systems. Setting up e-accounting infrastructure typically takes 2-4 weeks.
Currency and Inflation Accounting
Functional Currency
- Statutory books must be maintained in Turkish Lira (TRY)
- Foreign currency transactions are recorded at the exchange rate on the transaction date
- Month-end and year-end foreign currency balances must be revalued using the Central Bank’s exchange rates
Inflation Accounting (Enflasyon Muhasebesi)
Turkey reintroduced inflation accounting in 2024 after a long hiatus, as cumulative inflation exceeded the threshold:
- Applies when cumulative 3-year inflation exceeds 100% (using the D-PPI index)
- Financial statements must be restated to reflect purchasing power changes
- Both TFRS (IAS 29) and tax-basis inflation adjustments may apply
- This significantly impacts reported equity, depreciation, and tax calculations
Important for Foreign Investors: Inflation accounting can materially affect your subsidiary’s reported financials and tax position. Ensure your local accounting team and auditors are experienced in applying these adjustments.
Tax-Related Accounting Obligations
Corporate Tax Reporting
- Corporate tax rate: 25% (standard rate as of 2026)
- Filing: Annual corporate tax return by April 30
- Advance tax (Geçici Vergi): Quarterly declarations (Q1: May, Q2: August, Q3: November)
- Withholding taxes: Monthly declarations for salary, rental, and service payments
Transfer Pricing Documentation
Foreign-owned companies must prepare:
- Annual transfer pricing report - documenting related-party transactions
- Master file and local file - for companies exceeding certain revenue thresholds
- Country-by-country reporting (CbCR) - for groups with consolidated revenue above EUR 750 million
VAT Reporting
- Monthly VAT (KDV) returns by the 28th of the following month
- Standard VAT rate: 20%
- Reduced rates of 1% and 10% apply to certain goods and services
Practical Considerations for Foreign Investors
Setting Up Your Accounting Function
Foreign companies in Turkey typically choose one of these approaches:
Option 1: Outsource to a Local Accounting Firm (SMMM/YMM)
- Most common for SMEs and newly established companies
- Cost-effective (typically TRY 15,000-50,000/month depending on transaction volume)
- Ensures compliance with local requirements
- SMMM (Serbest Muhasebeci Mali Müşavir) handles day-to-day accounting
- YMM (Yeminli Mali Müşavir) provides tax certification and advisory
Option 2: In-House Accounting Team
- Suitable for larger operations with high transaction volumes
- Requires hiring qualified Turkish accountants
- Still advisable to retain a YMM for tax certification
Option 3: Hybrid Approach
- In-house team handles group reporting (IFRS)
- Local firm manages statutory Turkish books and tax compliance
- Popular among multinational subsidiaries
Common Pitfalls to Avoid
- Assuming IFRS compliance equals Turkish compliance - Statutory books must follow Turkish rules regardless of group reporting standards
- Late book notarization - Books must be notarized before January 1; late notarization carries penalties
- Ignoring e-accounting deadlines - Late registration for e-Fatura/e-Defter triggers fines
- Insufficient transfer pricing documentation - Tax authorities increasingly scrutinize related-party transactions
- Overlooking inflation accounting - Failure to apply inflation adjustments when required leads to incorrect tax filings
- Not reconciling TRY and foreign currency positions - FX gains/losses must be properly calculated and reported
Cost Estimates for Compliance
Here’s what foreign companies can expect to budget for accounting compliance:
- Monthly bookkeeping (outsourced): TRY 15,000 - 50,000
- Annual independent audit: TRY 200,000 - 1,000,000+ (depending on company size and auditor)
- Transfer pricing report: TRY 100,000 - 300,000
- YMM tax certification: TRY 100,000 - 250,000 annually
- E-accounting software/integration: TRY 20,000 - 100,000 setup + monthly fees
How FDI Consultancy Can Help
Navigating Turkey’s accounting and financial reporting landscape requires both technical expertise and local knowledge. At FDI Consultancy, we support foreign investors with:
- Accounting firm selection - connecting you with vetted, English-speaking accounting firms experienced with foreign-owned companies
- Audit coordination - facilitating communication between your group auditors and local audit teams
- Compliance setup - ensuring your company is properly registered for all e-accounting obligations from day one
- Ongoing advisory - helping you understand and plan for Turkish-specific requirements like inflation accounting and transfer pricing
- Financial reporting alignment - bridging the gap between Turkish statutory reporting and your group’s IFRS requirements
Get Expert Support
Setting up your accounting and reporting infrastructure correctly from the start saves significant time and cost down the road. Contact FDI Consultancy for a free consultation on your financial reporting obligations in Turkey.
Disclaimer: This guide provides general information about accounting standards and financial reporting requirements in Turkey as of April 2026. Regulations and thresholds are subject to change. Always consult with a qualified Turkish accountant (SMMM/YMM) or your independent auditor for advice specific to your company’s situation.