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Double Tax Treaties in Turkey
A presentation brought to you by CompanyFormationTurkey.com
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Taxation System in Turkey
The Turkish taxation system is a two-tier one, relying on the levy of direct and indirect taxes.
Turkey is an attractive destination for foreign investors who are interested in opening companies in countries with low corporate taxes.
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What Is a Double Tax Treaty?
The treaties signed for the avoidance of double taxation aim to regulate the income incurred by a company registered in a contracting state which has business operations in Turkey.
All agreements signed on this basis refer to the taxation of income, where income can be represented by various types of income taxes applicable to corporations in accordance with the local legislation.
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Turkey’s Double Tax Agreements
To prevent double taxation and in order to attract foreign investments, Turkey has concluded many treaties for the avoidance of double taxation.
Turkey has signed double taxation agreements with countries in Europe, Asia, the Middle East, North and South America.
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Who Can Benefit from Turkey’s Double Tax Treaties?
Individuals and companies that produce income both in Turkey and in the other signatory country benefit from reduced tax rates and withholding taxes.
Turkish companies with foreign shareholders interested in avoiding the double taxation of their profits may use the provisions of the treaties signed between Turkey and the home country.
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Provisions in Turkish Double Tax Treaties
According to these double tax treaties, the income and the capital are exempt from taxation, if the company is paying the same taxes in the treaty country.
If the regulations of the double tax treaties are not followed, the company may claim the refund of the paid taxes.
This is possible only after providing evidence that the taxes were already paid in the treaty country.
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Other Provisions in Turkish Double Tax Treaties
The taxes for which the double tax treaties apply in Turkey include: the income tax, the capital tax and any other taxes that may be levied in place of or in addition to these two after the double tax treaty was signed.
These bilateral agreements apply to residents of one or both contracting states.
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Special Protocols in Turkish Double Tax Treaties
More recent treaties, elaborated after the OECD model, also stipulate that the treaty countries must provide lists of taxpayers or any information that could lead to the avoidance of tax fraud.
Special protocols are concluded every year with offshore jurisdictions with the same purpose of avoiding tax evasion.
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Assistance in Opening Companies in Turkey
You can contact us if you are interested in opening a company in Turkey.
Our company registration agents in Turkey can also give you detailed information about the existing treaties and the ones that will be included in the tax treaty network.
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Thank you for your attention!
For more information, please contact us at:(+44) 203-287 0408 (for international clients)
www.companyformationturkey.com
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