- March 21, 2025
- Posted by: admin
- Category: Blog
Introduction
NACE codes play a crucial role in classifying economic activities in Turkey and across the European Union. Whether you’re starting a business, dealing with tax regulations, or applying for government incentives, understanding NACE codes is essential. This guide provides an in-depth look at what NACE codes are, their significance in Turkey, how businesses can determine the correct code, and how they impact taxation, legal obligations, and sector-specific regulations.
What Are NACE Codes?
NACE (Nomenclature of Economic Activities) is a classification system developed by the European Union to categorize businesses based on their primary economic activity. It is used for statistical purposes, regulatory compliance, and tax classification. In Turkey, the Turkish Statistical Institute (TÜİK) and the Revenue Administration (Gelir İdaresi Başkanlığı) use NACE codes to track economic activities, facilitate tax collection, and enforce industry regulations.
Each NACE code consists of a hierarchical structure, with different levels of detail:
Section (1 Letter) – Represents the broad economic sector (e.g., Manufacturing, Construction, Services).
Division (2 Digits) – Specifies a general area within a sector (e.g., 10 – Food Production, 41 – Construction).
Group (3 Digits) – Further defines the specific business type (e.g., 108 – Manufacturing of Other Food Products).
Class (4 Digits) – Provides a detailed classification of the business activity (e.g., 1082 – Manufacturing of Cocoa, Chocolate, and Sugar Confectionery).
For even greater specificity, Turkey sometimes uses 5- and 6-digit codes, which further refine the classification.
The Importance of NACE Codes in Turkey
NACE codes are not just for statistical purposes; they directly impact businesses in several ways:
1. Company Registration/Business Registration in Turkey
When establishing a company in Turkey, you must declare your primary business activity using the appropriate NACE code.
The correct classification affects tax rates, social security obligations, and industry-specific regulations.
2. Taxation and Incentives
Certain tax advantages, VAT exemptions, or reduced corporate tax rates apply based on a company’s NACE code.
Government incentives, such as KOSGEB grants, investment subsidies, and R&D incentives, are allocated based on these classifications.
3. Sector-Specific Regulations and Compliance
Different industries have specific legal and environmental regulations that companies must follow, determined by their NACE code.
For example, a food production company must comply with Turkish Food Codex regulations, while a construction company must meet Ministry of Environment and Urbanization standards.
4. Social Security and Workplace Safety
The Social Security Institution (SGK) uses NACE codes to determine mandatory insurance types, workplace safety obligations, and risk assessments.
High-risk industries (e.g., mining) have stricter occupational health and safety (OHS) requirements than low-risk businesses like software development.
5. International Trade and Customs Procedures
Exporters and importers must match their business activities with NACE codes to qualify for trade incentives, free trade agreements, and customs tax exemptions.
The Ministry of Trade relies on NACE classifications when evaluating trade licenses and permits.
How to Determine Your Business’s NACE Code
If you are registering a company in Turkey, follow these steps to find the correct NACE code:
1. Use the TOBB and GİB Online Databases
The Union of Chambers and Commodity Exchanges of Turkey (TOBB) provides an official NACE code lookup tool on its website.
The Revenue Administration (GİB) also offers a detailed classification guide.
2. Consult with a Certified Public Accountant (CPA – SMMM)
Accountants in Turkey are well-versed in tax laws and NACE classifications.
Choosing the wrong code may result in incorrect tax calculations, penalties, or ineligibility for government incentives.
3. Check Your Industry Association’s Guidelines
Many sectoral organizations and business chambers (e.g., Istanbul Chamber of Industry, Turkish Exporters Assembly) provide industry-specific NACE code lists.
4. Review Your Business License or Trade Registry Documents
The Trade Registry Gazette (Ticaret Sicil Gazetesi) contains NACE codes for existing businesses.
If you are acquiring an existing company, check its previous registration details.
5. Consider Future Business Activities
If you plan to expand into multiple sectors, you may need to register additional NACE codes.
Some businesses register secondary NACE codes to cover all possible activities.
Common NACE Codes in Turkey by Industry
Here are some frequently used NACE codes in Turkey across key industries:
Manufacturing
10.11 – Meat Processing and Preservation
10.71 – Bread, Pastry, and Confectionery Production
23.61 – Concrete Manufacturing
Construction and Real Estate
41.10 – Residential and Non-Residential Building Construction
42.11 – Road and Highway Construction
68.10 – Buying and Selling of Real Estate
Technology and IT Services
62.01 – Software Development and IT Consulting
63.11 – Data Processing, Hosting, and Related Activities
95.11 – Computer and Electronics Repair
Retail and Wholesale Trade
47.11 – Retail Sale in Non-Specialized Stores (e.g., Supermarkets)
46.90 – Non-Specialized Wholesale Trade
47.91 – Online Retail Sales
Tourism and Hospitality
55.10 – Hotels and Similar Accommodation
56.10 – Restaurants and Food Services
79.11 – Travel Agencies
Logistics and Transportation
49.41 – Freight Transport by Road
52.21 – Service Activities Related to Land Transportation
53.10 – Postal and Courier Activities
Changing or Updating Your NACE Code
Sometimes businesses need to update or change their NACE code due to expansion, mergers, or shifts in their primary business focus. Here’s how you can do it:
1. Submit an Application to the Trade Registry Office
Companies must apply to the Chamber of Commerce where they are registered.
The process involves updating the company’s activity details in the Trade Registry Gazette.
2. Update Tax and SGK Records
Notify the Revenue Administration (GİB) to avoid tax misclassification.
Inform the Social Security Institution (SGK) to ensure compliance with labor laws.
3. Apply for Revised Licenses and Permits
If your new business activity requires special permits or certifications, you must reapply with the relevant authorities.
Conclusion
NACE codes are a vital component of business registration, taxation, and regulatory compliance in Turkey. Selecting the right NACE code ensures that your business is classified correctly for tax purposes, industry regulations, and government incentives. Whether you’re a startup or an established company, taking the time to determine and update your NACE code can help you avoid legal issues and maximize financial benefits.
If you’re unsure about your NACE code, consulting a business lawyer or accountant is a smart move to ensure your company is on the right track.
