Türkiye’s QSC Incentive Looks Attractive on Paper — Pillar Two Tells a Different Story
Türkiye’s New Regional Hub Incentive: Does It Actually Work for Multinationals?
Law No. 7582, published in the Official Gazette on 4 June 2026, introduced a new structure into Turkish law under the name “qualified service centre” (QSC). Designed to attract multinational companies to manage their regional operations from Türkiye, the incentive package looks compelling on paper: a 95–100 percent corporate tax deduction on qualifying income, a broad income tax exemption for personnel, and a twenty-year window.
There is, however, a structural problem that stands in the way of the very multinationals the QSC is designed to attract: the OECD’s global minimum tax, Pillar Two. Under this framework, which Türkiye itself enacted in 2024, the value of the QSC incentive may be largely neutralised.
To be direct: Türkiye is offering the incentive, but the bill may be picked up by another country’s treasury.
This article examines the QSC mechanism, the international comparisons, and this critical paradox.
1. What Is the QSC?
A qualified service centre applies to companies that satisfy three cumulative conditions:
- Established to provide services to a related company or group of companies operating actively in at least three different countries
- Deriving at least 80 percent of annual gross revenues from related companies or the group abroad
- Operating in the service areas defined by statute, including financial advisory, strategic management, risk management, R&D coordination, human resources, legal advisory, and similar activities
A company satisfying these three conditions may apply to the Ministry of Industry and Technology for QSC status.
One significant restriction applies to legal services: advisory on domestic matters or Turkish law may only be provided through a Turkish lawyer or law firm authorised to practise under the Bar Association Act.
2. The Incentive Package
The main advantages available to companies with QSC status are as follows:
| Incentive | QSC | QSC in IFC |
|---|---|---|
| CIT deduction | 95% | 100% |
| Personnel income tax exemption | Up to 3x gross minimum wage | Up to 5x gross minimum wage |
| Duration | 20 years | 20 years |
QSCs holding a participation certificate at the Istanbul Finance Centre (IFC) qualify for the full exemption and the higher personnel threshold. The 95 percent rate applies to QSCs operating outside the IFC.
The twenty-year period runs from the first fiscal year in which the company commences operating as a QSC.
3. A Brief International Comparison
Türkiye’s QSC regulation is the product of a model that is widely used globally. Many countries offer tax incentives to attract multinational regional headquarters and shared service centres.
Singapore offers the most developed example of this model. Under the International Headquarters Award (IHQ) programme, companies can apply a concessionary tax rate of 5 to 15 percent to qualifying income above their baseline.
The conditions are concrete and verifiable: headquarters services in three countries, qualified staff ratios, and employment and expenditure commitments. Each application is negotiated individually with the Economic Development Board (EDB).
Ireland attracts the EMEA hubs of Google, Apple, and Facebook through a general corporate tax rate of 12.5 percent and an extensive treaty network. The critical distinction is that Ireland requires genuine economic presence. Management and decision-making must actually take place in Ireland.
The Netherlands offers an integrated ecosystem combining a corporate tax advantage with a 30 percent tax facility for incoming senior foreign employees, an R&D tax credit, and a broad treaty network.
The common feature of these jurisdictions is that the incentive rate, conditions, application process, genuine economic presence requirements, and Pillar Two compatibility have been developed over years of infrastructure building. Türkiye has attempted to assemble these elements in a single statutory article.
4. The Pillar Two Paradox: The Core of the Matter
This is the most important and least discussed dimension of the QSC regulation.
Türkiye enacted the OECD’s Pillar Two framework, the global minimum tax rules, into its own legislation in 2024.
The rule is straightforward, but its consequences are significant: where the effective tax rate of a multinational group with consolidated revenues exceeding €750 million falls below 15 percent in any jurisdiction, either that jurisdiction’s own minimum tax, the Qualified Domestic Minimum Top-up Tax (QDMTT), steps in, or the parent entity’s home country collects the difference through the Income Inclusion Rule (IIR).
The paradox arises precisely here.
Consider a company applying the 95 or 100 percent income deduction under the QSC. Its effective tax rate in Türkiye falls from 25 percent to effectively zero.
If that company belongs to a group within the scope of Pillar Two, meaning it has annual revenues above €750 million, one of two outcomes is unavoidable:
- Türkiye’s QDMTT steps in, topping up the effective tax rate to 15 percent and largely neutralising the economic value of the incentive.
- If the QDMTT is not applied sufficiently, the parent entity’s home country, such as Germany, France, the United Kingdom, or the Netherlands, collects the difference through the Income Inclusion Rule.
In either case, the result is the same: Türkiye offers the incentive, but the bill, whether through its own QDMTT or another country’s IIR, lands elsewhere.
Article 9 of the Law acknowledges this problem in part by providing that the QSC income deductions are excluded from the domestic minimum tax calculation. But is this sufficient?
Singapore addressed the same problem by developing a bespoke Pillar Two-compatible Refundable Investment Credit (RIC) mechanism. No equivalent structure currently exists in Türkiye.
Critical note: This paradox does not apply to mid-sized multinationals below the €750 million threshold. Pillar Two does not reach them. For this group, the QSC incentive may represent a genuinely meaningful advantage.
5. Other Structural Questions
The 80 percent revenue threshold. The requirement to derive at least 80 percent of revenues from related companies abroad raises practical questions. Is revenue measured on a gross or net basis? In mixed-activity structures, where some Turkish clients are also served, how is the threshold maintained? Will the incentive be clawed back if the threshold is breached? The communiqué must answer these questions.
Genuine economic presence uncertainty. The statute refers to “a company established to provide services” but sets no minimum employment level, physical presence requirement, or management activity test.
From an OECD/BEPS perspective, this is a significant weakness. There is no clear safeguard against shell company risk. Singapore and Ireland define this requirement through clear and verifiable criteria. Türkiye’s communiqué is still awaited.
Administrative fragmentation. The QSC definition will be set by the Ministry of Industry and Technology, the tax incentives sit within the Corporate Tax Law, and the personnel exemptions sit within the Income Tax Law.
This creates two different legislative frameworks and involves multiple ministries. It is not ideal from the perspective of international investors who need a single point of contact and a predictable process.
6. Conclusion: For Whom Does It Work?
The QSC regulation is aimed at the right target and represents a necessary step for Türkiye’s regional hub ecosystem. The incentive package, particularly the 100 percent rate within the IFC and the twenty-year horizon, is notable.
A realistic assessment is nonetheless required.
For large multinationals above the €750 million threshold, the value of the QSC incentive is significantly constrained by Pillar Two. Decision-makers will evaluate Türkiye primarily on commercial factors, including geographic location, the local talent pool, operational costs, and strategic positioning, rather than the tax saving. The fiscal advantage becomes a secondary consideration.
For mid-sized multinationals below the €750 million threshold, the picture is more positive. Since Pillar Two does not apply to this group, the full benefit of the incentive may genuinely be available, provided the communiqué resolves the remaining structural questions.
For both groups, the most critical question is: how clearly and predictably will the Ministry of Industry and Technology’s communiqué define the genuine economic presence requirement, the revenue threshold calculation methodology, and the administrative process?
Türkiye’s QSC is an opportunity, provided the right infrastructure is built.
What Singapore and Ireland demonstrate is that a tax incentive alone is not sufficient. It must be accompanied by a legal environment in which the incentive is trusted to work, a predictable administrative process, and clear rules on genuine economic presence.