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Tax authorities

Revenue Administration, Department of Taxpayer Services
Ilk Adim Cad., 06450 Dikmen-Ankara, Turkey
Tel: +90 312 415 29 00
Fax: +90 312 415 28 21 22
Website: www.gib.gov.tr

Tax rates at a glance

(As of September 2009) 

Corporate income tax rate (%) 20
Capital gains tax rate (%) 20(a)
Branch tax rate (%) 20

Withholding tax (%)
Dividends 15(b)
Interest (a)
From repurchase (repo) agreements 15(c)(d)
From Turkish government bonds and bills and private sector bonds 0/10(e)
From deposit accounts 15(c)(f)
From loans granted by foreign banks and foreign financial institutions 0(g)
From loans granted by other foreign entities 10(g)
Royalties from patents, know-how, etc. 20(h)
Professional fees
Petroleum-exploration activities 5(h)(i)
Other activities 20(h)(i)(j)
Progress billings on long-term construction and repair contracts 3(c)(j)
Payments on financial leases 1(h)(k)
Real estate rental payments 20(h)(i)(j)
Branch remittance tax 15(h)

Net operating losses (Years)
Carryback 0
Carryforward 5

(a) Capital gains and interest income derived by nonresident companies that do not have a permanent establishment or a permanent representative in Turkey from securities or other investment instruments (excluding deposits and overnight agreements) traded in the Turkish financial market are not subject to withholding tax.
(b) This withholding tax is imposed on dividends distributed to nonresident companies (except for companies that derive gains through permanent establishments or permanent representatives in Turkey). Nonresidents that do not have a permanent establishment or a permanent representative in Turkey are not subject to withholding tax on profits derived by mutual funds, regardless of whether the profits are distributed. Conversion of profits into capital is not regarded as a dividend distribution and is not subject to dividend withholding tax.
(c) This withholding tax applies to resident and nonresident companies.
(d) This withholding tax applies if the repurchase agreement is based on a state bond or treasury bill.
(e) The 0% rate applies to nonresident entities. The 10% rate applies to residents for bonds and bills issued after January 1 2006.
(f) A withholding tax rate of 15% applies to deposit interest, regardless of the maturity and regardless of whether the deposits are denominated in Turkish lira or foreign currency.
(g) The principal of loans that are denominated in foreign exchange and remitted to Turkish residents (except for banks and other financial institutions) and that have an average maturity of less than one year are subject to a 3% contribution to the Resource Utilisation Support Fund (RUSF).
(h) This withholding tax applies to nonresident companies.
(i) This withholding tax is a final tax imposed on these payments. Alternatively, gross income may be subject to corporation tax at a rate of 20% (for 2008).
(j) It is optional to report this income on the annual income tax return. If this option is selected, the withholding tax is credited against the tax calculated on the annual income tax return.
(k) To qualify for the 1% withholding tax, the operation must be within the scope of Financial Leasing Law No 3226. Otherwise, the withholding tax rate is 20%.

Source: Ernst & Young

Tax

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BDO

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Grant Thornton's tax practice is led by Emin Taylan who specialises in international taxation. The firm offers clients tax advisory services including M&A.

Güreli Baker Tilly offers clients advice on VAT, international tax planning and domestic and foreign investment. The firm is led by the honorary chairman Orhan Güreli The firm uses the international network of Baker Tilly to benefit its clients.

See also

Turkey
Middle East (Regional Rankings)

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