The North Cyprus Council of Ministers has introduced a one-off early-payment discount for 2025 corporate and personal income tax through Decree-Law No. 48/2026, published in TRNC Official Gazette No. 79 on 24 April 2026. Under the literal wording of the decree, taxpayers who settle the full 2025 liability before the first installment due date passes receive an additional 5% discount on top of any existing entitlement. Two points: payment must cover the full assessed tax, and it must be completed before the first installment due date passes. The relief is limited to the 2025 tax year and is administered by the Ministry of Finance. The decree is issued under Article 112 of the TRNC Constitution and covers both corporate taxpayers and individual income tax taxpayers within its scope.
How the Discount Layers onto Existing Relief
Decree-Law 48/2026 adds to — not replaces — the existing compliance-based discount regime. Under Corporate Tax Law No. 41/1976, Article 40(4), and Income Tax Law No. 24/1982, Articles 52(4) and 52(5), taxpayers with three years of timely filings and payments already benefit from a 5% discount. The new decree preserves this entitlement and overlays an additional 5%, conditional on early settlement of the full 2025 liability. The intent is to accelerate state cash collection while rewarding voluntary compliance.
Discount Mechanism — Two Taxpayer Groups
| Taxpayer Profile | Existing Discount | Decree-Law 48/2026 Add-On | Total Discount |
|---|---|---|---|
| Three-year record of timely filings and payments (under CT Law 41/1976 Article 40(4) or IT Law 24/1982 Article 52(4)/(5)) | 5% | +5% | 10% |
| Taxpayers without an existing entitlement | 0 | +5% | 5% |
Conditions for Eligibility
Both taxpayer groups must satisfy two conditions: (1) the 2025 return must be filed within the statutory deadline; (2) the full assessed tax must be paid before the first installment due date passes. Partial early payments — for example settling only the first installment, or paying half upfront with the remainder in installments — do not qualify under the decree. Corporate Tax and Income Tax first installments fall on different dates, so each taxpayer must apply the deadline specific to their tax type.
Worked Example — Corporate Tax Base of 1,000,000 TL
The two-scenario calculation below illustrates Decree-Law 48/2026 for a company with a 2025 corporate tax base of 1,000,000 TL taxed at the 15% corporate tax rate. The first scenario covers a company qualifying under CT 40(4) for the existing 5% compliance discount through three years of clean filings and timely payments, while the second covers a company without that entitlement. In the worked example the additional 5% is applied to the gross tax. The table below sets out the calculation step by step for both scenarios.
| Calculation Step | Existing 5% Entitlement (CT 40(4)) | No Existing Entitlement |
|---|---|---|
| Tax Base | 1,000,000 TL | 1,000,000 TL |
| Corporate Tax Rate | 15% | 15% |
| Gross Tax | 150,000 TL | 150,000 TL |
| Existing 5% Discount (CT 40(4)) | −7,500 TL | 0 TL |
| Decree-Law 48/2026 Additional 5% | −7,500 TL | −7,500 TL |
| Tax Payable | 135,000 TL | 142,500 TL |
| Total Saving | 15,000 TL (10% combined) | 7,500 TL (5%) |
Who Is Affected?
For corporate taxpayers: limited companies and other corporate entities qualify for the additional 5% provided the full 2025 corporate tax liability is settled before the first installment due date passes; companies should weigh the discount against short-term financing costs and the working-capital impact of accelerating payment. For income tax taxpayers : sole traders qualify for the same 5% add-on where the full 2025 income tax assessment is settled before the first installment due date. For taxpayers without an existing 5% entitlement: those who do not qualify under CT 40(4) or IT 52(4)/(5) for the existing compliance discount obtain the 5% under this decree for the first time.
