Double Taxation Agreement With Turkey

December 7, 2020 by eklose

Double taxation agreements also reduce withholding tax on dividends, interest and royalties for signatory states. The dividend tax in Turkey is 15%, but according to an existing contract, it can be 10% or 5%. An eligibility criterion applies: the 5% rate applies when dividends are paid to a company that holds at least 25% of the payment. If this is not the case, the usual rate of 15% applies. Individuals and companies operating in one or both signatory states are covered by Turkey`s double taxation agreements. Turkish double taxation conventions are covered by the following aspects: each tax treaty is negotiated individually and each time a country`s legislation evolves, changes are made to those contracts. Therefore, you can ask our Turkish lawyers for complete and up-to-date information if you need up-to-date information on a particular agreement. Treaties to avoid double taxation are signed to encourage foreign investment in the Turkish market by creating a competitive and attractive business environment for international companies. Considering that foreign investors can obtain the right to acquire real estate in Turkey, most double taxation agreements provide for the taxation of these properties on the basis of articles relating to the taxation of real estate.

Under most Turkish double taxation agreements, income from property ownership is taxed in one of the states that are signatories to such an agreement in the country where the property is located. In Turkey, income from forestry or other agricultural activities is taxed. The main reason why countries, including Turkey, sign double taxation conventions is that these documents generally govern how taxes collected in two countries are imposed on individuals and businesses doing business in the states that sign the convention. The double taxation provisions of the Turkish conventions are developed in accordance with the national tax laws of other countries, which is why each tax treaty covers a different tax rate.

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