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Economy and Banking Sector of Turkey

Withholding Tax

Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.

Withholding Tax Rates in Turkey: 0.0 - 15.0%

Withholding tax rates applied on payments of interest and dividends in Turkey are shown in Table 1.

Dividends Interest
Natural Persons (residents) 0.0 %0.0 %
Natural Persons (non-residents) 15.0 %10.0 %
Table 1. Withholding tax rates in Turkey.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of Turkey: 29 Signed Agreements

Turkey signed DTAs which already came info force with the following jurisdictions:

AT Austria
BE Belgium
BG Bulgaria
HR Croatia
CZ Czech Republic
DK Denmark
EE Estonia
FI Finland
FR France
DE Germany
GR Greece
HU Hungary
IE Ireland
IT Italy
LV Latvia
LT Lithuania
LU Luxembourg
MT Malta
NL Netherlands
NO Norway
PL Poland
PT Portugal
RO Romania
SK Slovakia
SI Slovenia
ES Spain
SE Sweden
CH Switzerland
GB United Kingdom

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Exchange on Request: 5 Signed Agreements

Turkey signed TIEAs which already came info force with the following jurisdictions :

JE Jersey

There are also several agreements between Turkey and other jurisdictions which was signed but haven't yet come into force:

BM Bermuda
GI Gibraltar
GG Guernsey
IM Isle of Man

Automatic Exchange: Starts in September 2018

Turkey didn't sign the automatic information exchange agreement but made a commitment to start the automatic information exchange in September 2018.

Automatic Excnange: 0 Bilateral Agreements to Receive Information

Turkey has not singed any bilateral agreements to automatically receive information.

Automatic Excnange: 0 Bilateral Agreements to Send Information

Turkey has not singed any bilateral agreements to automatically send information.

Further Information

FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

FATCA Status in Turkey
IGA in effect since 29 July 2015, Model 1

Turkey has FATCA agreement with the U.S. in effect since 29 July 2015 (Intergovernmental Agreement Model 1). Financial institutions operating in Turkey are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Turkish financial accounts hold in U.S. financial institutions will be reported to Turkish authorities.

Further Information