# What Is the Young Entrepreneur Incentive? Using the Income Tax and Social Security Exemptions

> The scope, eligibility conditions and key details of the income tax exemption and social security premium support available to entrepreneurs under 29.

Kaynak / Source: https://sinemyavuz.com.tr/en/blog/genc-girisimci-destegi
Kategori / Category: Incentives
Yayın / Published: 2026-02-18
Güncelleme / Updated: 2026-02-18
Yazar / Author: Sinem Yavuz (SMMM) — SMMM Sinem Yavuz

The young entrepreneur exemption is an incentive that exempts eligible young founders — setting up a sole proprietorship for the first time — from income tax up to a certain earnings threshold. The most common issue we see in practice is entrepreneurs starting their business without knowing this incentive exists, or completing the start-up steps in the wrong order — because the exemption cannot be claimed retroactively.

## Who Qualifies?

The core conditions for eligibility are:

- Not having turned 29 as of the tax registration date
- Registering as an income taxpayer for the first time (never having used this exemption before)
- Actually working in or actively managing your own business
- Running the business as a newly established venture, not one taken over from an existing business

In partnerships, each partner must independently meet these conditions. If one partner doesn't qualify, the exemption simply doesn't apply to that partner's share — the other qualifying partners can still benefit for their own shares.

## Exemption Amount and Duration

The exemption covers income tax on earnings up to a set amount, for three tax periods starting from the year the business begins. That threshold is revalued every year, so rather than quoting a figure that will be outdated by the time you read this, we recommend confirming the current amount with us before you register — the mechanism matters more than any specific number, since the number changes annually.

One important detail: the exemption covers earnings only up to the threshold, not the entire income. Any amount above that threshold is taxed at the standard progressive income tax rates.

## The Social Security Premium Support Is a Separate Incentive

A related incentive often confused with the tax exemption is the Bağ-Kur (self-employed social security) premium support. It works independently of the income tax exemption and covers a portion of the premium through Treasury funding for a set period. The two incentives don't exclude each other — an eligible entrepreneur can benefit from both simultaneously.

## Situations That Can Retroactively Void the Exemption

The following can end the exemption or cause it to be revoked retroactively:

- A finding that the business isn't a genuine activity, but was set up solely to claim the exemption
- Starting the business by acquiring a stake in an existing company rather than founding a new one
- A finding that the business isn't actually run by the registered owner — for example, if someone else is managing it in practice

That's why structuring the company and its line of business correctly before filing the start-of-activity notice is critical. Corrections made after registration usually result in losing the exemption.

## How We Support the Application Process

We start working with young entrepreneur candidates before the start-of-activity notice is filed. From choosing the right company type to tax office registration, from correctly defining the activity code to the social security filing, we plan the entire process to preserve the exemption's validity — and throughout the three-year exemption period, we prepare your annual income tax return correctly under this exemption.