KKEG is the Turkish abbreviation for Kanunen Kabul Edilmeyen Gider. It refers to an expense that may be recognised in the accounting records but cannot be deducted when determining taxable income.
Recognition of an expense for accounting purposes does not automatically make it deductible for tax purposes. Non-deductible amounts are added back to commercial profit when calculating the taxable base.
For corporate taxpayers, Article 11 of the Turkish Corporate Income Tax Law contains key rules relating to non-deductible expenses.
KKEG is not the same as account 689
KKEG is a tax classification, not an accounting account code.
An expense recorded under account 689 is not automatically KKEG. Likewise, an amount recorded under accounts such as 760, 770 or 780 may be non-deductible depending on the nature of the transaction.
The tax treatment therefore depends on the substance of the expense rather than the account in which it is recorded.
Common examples of KKEG
| Expense | Status | Notes |
|---|---|---|
| Corporate income tax accrued | Non-deductible | Corporate income tax calculated on taxable profit |
| Tax penalties | Non-deductible | Including certain tax loss and procedural penalties |
| Administrative fines | Non-deductible | Where deduction is not permitted under the applicable rules |
| Tax late-payment charges and interest | Non-deductible | Assessed separately from the underlying tax liability |
| Social security late-payment penalties and charges | Non-deductible | Assessed separately from the principal contribution |
| Expenses relating to thin capitalisation | Non-deductible | To the extent covered by the applicable rules |
| Profits distributed through transfer pricing | Non-deductible | Related-party transactions not complying with the arm’s-length principle |
| Financing expense restriction | Partially non-deductible | Subject to statutory conditions |
| Passenger car expenses exceeding statutory limits | Partially non-deductible | Expense, lease and depreciation limitations may apply |
| Expenses unrelated to business activities | Non-deductible | Expenses not connected with earning or maintaining business income |
Note: Monetary thresholds, percentages and application rules may change. The legislation applicable to the relevant period should always be checked.
Is the underlying tax or social security liability itself KKEG?
The principal liability should be distinguished from penalties, late-payment charges and similar ancillary amounts.
Whether a tax or social security contribution is deductible depends on the legislation applicable to that specific item. Therefore, an unpaid tax or social security liability is not automatically KKEG in its entirety.
How does KKEG affect the tax base?
Example:
- Commercial profit: TRY 1,000,000
- KKEG: TRY 100,000
Assuming there are no other additions or deductions:
TRY 1,000,000 + TRY 100,000 = TRY 1,100,000
The expense remains in the accounting records, but the non-deductible amount is added back when calculating taxable income.
Is VAT relating to KKEG deductible?
As a general rule, VAT incurred on expenses that are not deductible for income or corporate income tax purposes cannot be deducted under Article 30/d of the Turkish VAT Law.
Specific rules may apply to certain categories of expenditure, so VAT treatment should be reviewed separately for each item.
Common mistakes
- Treating every transaction recorded under account 689 as KKEG
- Reviewing KKEG only at year-end
- Failing to distinguish penalties, interest and late-payment charges
- Treating expenses unrelated to business activities as deductible
- Assuming that VAT treatment is identical for every KKEG item
- Failing to reconcile KKEG in the accounting records with the tax return
Why is KKEG important?
Failing to identify non-deductible expenses can result in an understated tax base. Conversely, incorrectly treating a deductible expense as KKEG may result in a higher taxable base than necessary.
KKEG should therefore be reviewed at transaction and document level, rather than solely by reference to account balances.
Frequently Asked Questions
Is every amount recorded under account 689 KKEG?
No. KKEG is a tax classification rather than an accounting account.
Are traffic fines tax deductible?
Fines that are not deductible under the applicable Turkish tax rules must be added back when determining taxable income.
Is VAT relating to KKEG deductible?
As a general rule, it is not deductible under Article 30/d of the Turkish VAT Law. Specific rules applicable to the relevant expense should also be reviewed.
Is an unpaid social security contribution automatically KKEG?
No. The principal contribution and penalties or late-payment charges must be assessed separately.
Source
Turkish Revenue Administration – 2026 Corporate Income Tax Return Guide
This content is provided for general information purposes only. The tax treatment of an expense may vary depending on the nature of the transaction, the taxpayer’s activities, supporting documentation and the legislation applicable to the relevant period.