Introduction

Venture capital is defined as investing in areas where no one has previously dared to invest. 1 In the guideline prepared by the Capital Markets Board ('CMB'), which has the authority to regulate and supervise the capital markets, venture capital is expressed as a form of financing that enables dynamic and creative entrepreneurs—who lack sufficient financial resources—to realise their investment ideas. 2

In the Communiqué on the Principles Regarding Venture Capital Investment Trusts 3, published in 2013, venture capital investments are not confined 4 solely to investments in creative ideas or newly established companies in their early stages. Rather, they also encompass 5 company acquisitions, restructurings, and expansion investments made in companies pursuing growth strategies. 6

In Turkish law, venture capital investment trusts ('VCITs') and venture capital investment funds operate under the strict supervision of the CMB. The Capital Markets Law No. 6362 ('CML') generally regulates the establishment and operating conditions of investment trusts and funds in Turkey. Detailed regulations on the subject are provided in the Communiqué on the Principles Regarding Venture Capital Investment Trusts (III-48.3) and the Communiqué on the Principles Regarding Venture Capital Investment Funds (III-52.4), both published by the CMB.

There are also specific tax regulations governing the taxation of venture capital investment trusts and funds. The primary regulation on this matter is Article 5/1(d) of the Corporate Tax Law No. 5520 ('CTL'). 7  According to this provision, the earnings of venture capital investment funds or trusts are exempt from corporate tax. In other words, venture capital investment trusts and funds benefit from an exemption and an incentive concerning their own earnings, which is technically deemed a type of tax expenditure. In this context, whether this exemption may also be deducted from the domestic minimum corporate tax base should also be examined separately.

Whilst it is not the focus of this article, a very general summary may be made as follows: Pursuant to CTL Article 32/C and the explanations in Corporate Tax General Communiqué No. 1, one of the exemptions that may be deducted from the tax base in calculating the domestic minimum corporate tax—except for income derived from real estate - is the exemption under Article 5/1(d). For investment funds and trusts, only income derived from real estate would fall within the scope of the domestic minimum corporate tax. However, this is more relevant to real estate investment funds and trusts and, by its nature, is not directly applicable to venture capital investment trusts.

It is also worth briefly addressing the relationship between the exemption granted to venture capital investment trusts and funds pursuant to CTL Article 5/1(d) and the participation exemption regulated pursuant to CTL Article 5/1(a). 8 Generally, whilst the earnings of funds and trusts benefiting from the special exemption under Article 5/1(d) may also fall within the scope of the participation exemption under Article 5/1(a), venture capital investment trusts and funds constitute an exception to this rule. Even though their earnings are exempt under Article 5/1(d), they may also benefit from the exemption under Article 5/1(a).

Thus, the fundamental features of the corporate tax exemption granted to venture capital investment trusts and funds may be summarised as above. The focus of this article, however, is the 'stamp duty' exemption specific to venture capital investment trusts and funds, the legal basis of this exemption, and an administrative ruling issued on the matter, which are examined in detail in the following section.

Stamp Tax Exemption Granted to Venture Capital Investment Trusts and Funds

Pursuant to Table (2) attached to the Stamp Tax Law No. 488 ('STL'), papers executed exclusively in relation to venture capital investments by venture capital investment trusts and venture capital investment funds, along with other documents issued in connection with such contracts, are exempt from stamp duty.

Consequently, unlike the corporate tax exemption—which does not impose a limitation based on 'portfolio income'—the stamp duty exemption is limited by the 'scope of activity' relevant to the documents.

This limitation naturally implies the need for careful consideration in applying the exemption: not every document executed by venture capital investment trusts and funds will qualify for the stamp duty exemption.

A Ruling of the Revenue Administration

In its determination dated 14 November 2019 (No. 97895701-155[2017/287]-977747) 9, the Istanbul Tax Office Directorate evaluated the stamp duty exemption as follows:

  • Article 21 of the Communiqué on the Principles Regarding Venture Capital Investment Trusts (III-48.3) and Article 18 of the Communiqué on the Principles Regarding Venture Capital Investment Funds (III-52.4) list the transactions that qualify as venture capital investments.
  • Portfolio custody services are not included in these lists.
  • Accordingly, the 'Portfolio Custody Agreement Relating to Venture Capital Investment Funds' executed between the applicant company and the relevant bank's Capital Markets Department cannot be evaluated within the scope of Paragraph IV/50 of Table (2) of the STL and consequently cannot benefit from the stamp duty exemption

Thus, whilst the Revenue Administration founded its assessment of the exemption on the definition of 'venture capital investments' pursuant to Article 21 of Communiqué III-48.3 and Article 18 of Communiqué III-52.4, the criteria it applied in interpreting these definitions are not clearly understood from the determination summarised above.

In this context, it may be beneficial for venture capital investment trusts and funds to explicitly identify in their contracts, for stamp duty exemption purposes, which type of venture capital investment as defined pursuant to Communiqué III-48.3 and/or Communiqué III-52.4 the relevant document pertains to. Whilst such a clause may not eliminate the risk of criticism from the Revenue Administration entirely, it may strengthen the taxpayer's defence in the event of an assessment.

Conclusion

A special exemption is granted to venture capital investment trusts and funds pursuant to CTL. This exemption may be characterised as a 'tax expenditure'. Considering that they may also benefit from the exemption pursuant to CTL Article 5/1(a), it may be argued that they are subject to a different regime compared to other investment funds.

As for stamp duty exemption, unlike the exemption in the CTL, it is not granted directly to the entity (i.e., venture capital investment trusts and funds). Rather, the exemption is confined to contracts executed exclusively in relation to venture capital investments, as defined pursuant to the capital markets regulations.|

However, this limitation should not preclude the application of other stamp duty exemptions applicable pursuant to the STL to documents executed by venture capital investment trusts and funds. For instance, the stamp duty exemption granted for share transfer agreements or documents relating to mergers or demergers conducted pursuant to CTL Article 19 should, in our view, also apply to venture capital investment trusts and funds.

Nevertheless, the application of such exemptions must be evaluated carefully for each component of the relevant document, and contractual provisions should be drafted with stamp duty implications in mind.
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  1. The definition is made by General Georges Doriot. Alexander Haislip, Essentials of Venture Capital, Wiley, 2011, p. 1.
  2. Sermaye Piyasası Kurulu, Girişim Sermayesi Yatırım Ortaklıkları, Yatırım Bilgilendirme Kitapçıkları, 2024, p. 4.
  3. Girişim Sermayesi Yatırım Ortaklıklarına İlişkin Esaslar Tebliği (III-48.3), Official Gazette, 9 October 2013, No. 28790.
  4. Namely “venture capital”
  5. Namely “private equity”
  6. Salih Tayfun İnce, Girişim Sermayesi Yatırım Ortaklıkları ve Paysahipleri Sözleşmesi, On İki Levha Yayıncılık, 2019, p. 9-10.
  7. As regards the disposal of participation shares of venture capital investment funds and shares of venture capital investment trusts, the taxation must be examined separately within the framework of ‘capital gains’. This matter, however, falls outside the scope of the present article.
  8. As the scope of this article is limited to stamp tax, only a concise and general overview of corporate tax implications has been provided.
  9. B.07.1.GİB.4.34.18.01-155 [2017/287] Private Ruling”, retrieved November 24 2025 from https://www.lexpera.com.tr/resmi-gazete/metin/b-07-1-gib-4-34-18-01-155-2017-287-977747-sayili-ozelge-2