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Sercan Bahadır
A. At a glance (a)
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(a) The rates in the table are for illustrative purposes only. For detailed information, please contact EY in Türkiye.
(b) The 15% rate applies to payments made for online advertising services performed by nonresident entities or individual service providers and to payments made to resident and nonresident entities and individuals who intermediate the provision of such services. The 0% rate applies to payments made to resident entity service providers or resident entities that intermediate the provision of such services. The local withholding tax rate of 20% applies to income generated by nonresidents from professional services other than petroleum exploration activities.
B. Taxes on corporate income and gains
Corporate income tax. Companies whose legal or business headquarters (as stated in their articles of association) are located in Türkiye or whose operations are centered and managed in Türkiye are subject to corporation tax on their worldwide income. In Turkish tax legislation, they are described as full liability taxpayers; they are also known as resident companies.
Taxable income of limited liability taxpayers (nonresident companies or taxpayers other than full liability taxpayers) is comprised of the following:
• Professional fees obtained in Türkiye
• Profits from commercial, agricultural and industrial enterprises in Türkiye (if they have an establishment or a permanent representative in Türkiye)
• Income arising from rental of real estate, rights and movable property in Türkiye
• Income obtained in Türkiye from various types of securities
• Other income and revenue obtained in Türkiye
Rates of corporate tax. The effective corporate tax rate is 25% for the 2024 tax year. However, incentive programs provide for reduced corporate tax rates for income from the investments supported (see Tax incentives).
The corporate tax rate was increased to 30% for banks and companies established under Law No 6361, which are payment and electronic money institutions, authorized foreign-exchange institutions, asset management companies, capital market institutions, insurance and reinsurance companies and pension companies. The new rate applies to their corporate earnings of 2023 and the following tax periods.
Article 35 of Law No. 7256, published in the Official Gazette dated 17 November 2020, provides that the corporate tax rate will be applied with a two-point discount on the corporation income in five accounting periods for companies with shares offered to the public (except for example, banks, financial leasing companies, factoring companies, financing companies, payment and e-money institutions, insurance and reassurance companies, asset management companies and pension companies) at a rate of at least 20% on the Istanbul Stock Exchange to be traded for the first time, starting from the accounting period when their shares are offered to the public for the first time.
Article 15 of Law No. 7351, published in the Official Gazette dated 22 January 2022, provides that the corporate tax rate will be applied with a one-point discount for earnings that are generated exclusively from exports and for income obtained from the production activities of the companies that have the industrial registration certificate and are actually engaged in production activities. Furthermore, Article 21 of Law No. 7456, published in the Official Gazette dated 15 July 2023, provides that the corporate tax discount rate applied to the profits of exporters arising exclusively from exports is increased from one point to five points. Considering the current corporate tax rate (25%), a 20% corporate tax applies to profits generated from exports. Article 62 of Law No. 7491, published in the Official Gazette dated 27 December 2023, provides that the five-point discount will be also applied to earnings obtained by manufacturers or suppliers from export activities carried out through foreign trade capital companies or sectoral foreign trade companies based on intermediary export contracts. This five-point discount is applicable for the income generated as of 1 January 2023.
Digital Services Tax.
The Digital Services Tax (DST) is levied at a rate of 7.5% as an indirect tax on in-scope revenues generated in Türkiye from the provision of certain digital services. It applies only to companies with global in-scope revenues of at least EUR750 million and with revenues of at least TRY20 million in Türkiye from in-scope services.
The DST applies to revenues generated from the following categories of services in Türkiye:
• All types of digital advertising services, including services such as advertisement control and performance measurement services, services relating to data transmission and user management (that is, the sale of user data), and technical services relating to the display of advertisements
• The sale of audio, visual or digital content in digital format, as well as services provided in digital format for listening, viewing, playing or recording digital content or using such content in digital format (including computer programs, applications, music, video, games and in-game applications)
• Digital intermediary activities that allow users to interact with other users, including digital intermediary activities that can facilitate the sale of goods and services between users
• Intermediary services provided in a digital environment for the above categories of services
DST applies only to companies with global in-scope revenues exceeding EUR750 million and with revenues exceeding TRY20 million in Türkiye from in-scope services. Both conditions must be met for a company to be subject to the tax. If a digital service provider meets both thresholds, it will become liable for the DST as of the fourth month following the month in which the thresholds are met. The law authorizes the president of Türkiye to reduce the revenue thresholds to as little as zero or to increase them to up to triple the specified levels.
Taxpayers and those responsible for tax declarations must submit a DST return to the relevant tax office by the end of the month following the tax period and pay the tax by the same deadline.
Tax incentives. Incentive regulations provide for a wide range of incentive and support elements for certain investments with incentive certificates, including reduced corporate tax rates, government support for interest on loans, government support for employees’ and employers’ shares of social security premiums, government support for income tax for wages, value-added tax (VAT) and customs duty exemptions, VAT refund support and allocation of treasury-owned lots.
The incentive and support elements vary according to the type, sector, subject, size and place of the investment.
Fifty percent of the following types of income with respect to inventions resulting from research, development, innovation and software development activities performed in Türkiye are exempt from corporate tax under certain conditions:
• Income derived from leasing.
• Income derived from transfers or sales.
• Income derived from marketing through mass production in Türkiye. Based on the Communiqué for the incentive, this refers to the sales of an item that is mass produced in Türkiye and that has a license or beneficial model certificate. The Turkish Patent Institute grants a license under an examination system. It grants a beneficial model certificate as a result of a research report.
• Income pertaining to a license or beneficial model certificate for an invention that is included in the income obtained from the
sale of the products produced in Türkiye through the use of this invention in the production process.
In addition, the leasing, transfer and sale of intangible assets pertaining to a license or beneficial model certificate for an invention is exempt from VAT if the invention is produced as a result of research and development (R&D/design), innovation and software activities.
For the assessment of the corporate tax base, taxpayers can deduct 50% of the interest amount calculated over the capital increases in cash in capital companies and the part of the capital covered by cash in newly incorporated companies (this deduction does not apply to entities operating in the finance, banking and insurance industries as well as to state economic enterprises). For the discount application regarding the cash capital increase, the discount rate will be 75% instead of 50% for the portion of the capital increase covered by cash brought from abroad.
The following is the calculation of the deduction:
Deduction = Increased capital cash amount x Central Bank of the Republic of Türkiye interest rate x Period (Months) x Discount rate
For purposes of the above calculation, the Central Bank of the Republic of Türkiye interest rate equals the latest weighted annual average interest rate applicable to commercial loans extended by banks in Turkish lira announced by the Central Bank of the Republic of Türkiye for the year of deduction. “Period (Months)” refers to the period from the capital increase to the last day of the financial year.
Under Article 49 of Law No. 7417, the duration of benefiting from the discount application is limited to five years. Accordingly, this reduction will be used separately for the accounting period in which the decision regarding the capital increase or the articles of association was registered at the initial establishment stage and for the four accounting periods following this period.
For in-cash capital increases made before the publication date of the law, this discount will be applied for five accounting periods, including the 2022 accounting period.
Incentives for R&D/design centers and Technology Development Zones. Special incentives apply to R&D/design centers and Technology Development Zones (TDZs). Broadly, these incentives fall into the following categories:
• Corporate income tax advantage for R&D/design centers (Law No. 5746)
• Corporate income tax advantages for TDZs (Law No. 4691)
• Payroll incentives for R&D/design or software personnel (Law Nos. 5746 and 4691)
• Social security premium support
• Stamp duty exemption
• Other tax exemptions for R&D/design centers and TDZs (Law Nos. 5746 and 4691)
• Non-refundable cash grants for R&D and innovation projects
For further information regarding the above incentives, please contact EY in Türkiye.
and are subject to corporation tax. Capital gains are generally computed by subtracting the cost of the asset, including the related expenses paid by the seller, from the selling price.
Capital gains derived from sales of depreciable fixed assets are not taxable to the extent the gains are reinvested in new fixed assets. However, the amount of gains used to acquire new assets is subtracted from the depreciable cost of the new asset. Capital gains that will be used for reinvestment are transferred to a special reserve account. If the special reserve is not used to finance the purchase of similar new assets in the following three years, the balance in the reserve is included in taxable income.
Capital gains derived from sales of resident companies’ shares by nonresident companies without a permanent establishment in Türkiye are subject to corporation tax. In computing these gains, changes in exchange rates are not taken into account.
Seventy-five percent of capital gains derived by corporate taxpayers from the disposal of shares owned for at least two years qualify for corporate tax exemption if the gains for which exemption is claimed are recorded as a special fund under the shareholder’s equity account in the balance sheet until the end of the fifth year following the year of sale.
Administration. Companies file tax returns based on their financial accounting year.
Tax returns must be submitted to the relevant tax office by the last day of the 4th month after the end of the accounting period. The return must be accompanied by the balance sheet, income statement and other required documents.
Corporation tax due must be paid by the end of the fourth month following the end of the accounting period.
Companies must make quarterly payments of advance corporation tax during the tax year. As of 1 January 2022, the advance corporation tax period is reduced to nine months, so companies will not declare advance corporation tax return for the fourth quarter.
If advance corporation tax exceeds the final tax payable, the excess amount can be offset against the company’s other tax liabilities or it can be refunded.
Dividends. Dividends received by resident companies from other resident companies are not subject to corporation tax.
Dividends received from foreign companies are included in taxable income. However, certain dividends received from foreign companies may qualify for exemption from corporation tax under the participation exemption or the international holding regime (see Participation exemption and International holding companies).
Withholding tax at a rate of 10% is imposed on dividends paid by resident corporations to the following recipients:
• Resident individuals
• Resident recipients who are not subject to corporation tax and income tax, or are exempt from such taxes
• Nonresident individuals
• Nonresident corporations (excluding those receiving dividends through a PE or permanent representative in Türkiye)
• Nonresident recipients who are exempt from corporation tax and income tax
A branch remittance tax is imposed at a rate of 10% on profits remitted by nonresident corporations that have a PE or permanent representative in Türkiye to their headquarters.
Foreign tax relief. Corporation tax and similar taxes paid abroad on income that is derived abroad and that is included in the Turkish accounts may be offset against the corporation tax that is assessed on such income in Türkiye.
In cases in which the controlled foreign company (CFC) rules are applied, the taxes similar to income and corporation taxes that the foreign affiliate has paid can be set off against the corporation tax that is calculated on the basis of the earnings of the foreign company.
Resident companies that have a direct or indirect participation in shares or voting rights of 25% or more in foreign subsidiaries can claim a tax credit for the corporate or income tax paid by foreign subsidiaries in their jurisdictions on profits out of which dividend distributions were paid to the resident companies. The credit is limited to the tax in Türkiye that is attributable to the dividend distributions. As a result, the credit applies only to dividends that do not qualify for the participation exemption.
Amounts that are set off against the taxes that are assessed in Türkiye on the income derived from the foreign countries may not exceed the tax amount that would be calculated by applying the local corporation tax rate (25%) to such earnings.
Foreign taxes that cannot be offset against the corporate tax in Türkiye because of insufficient corporate income may be carried forward for a period of three years. The tax credit can also be offset against advance tax payments.
C. Determination of trading income
General. The corporate tax base is determined by deducting expenses from the revenue of an enterprise. However, the following items are exempt from corporation tax:
• Revenue derived by corporations, including nonresident companies, from participations in the capital of other corporations that are subject to full corporate taxation, excluding shares of profits from some participation certificates of investment funds and stocks in investment partnerships (whose portfolio includes foreign currency or gold or other precious metals or marketable securities with the underlying assets)
• Dividends received from shares of venture capital investment trusts and venture capital investment funds, income derived from returning these participation certificates to the fund and earnings generated as a result of the valuation of these participation certificates
• Dividends received from Turkish lira investment funds purchased before 15 July 2023, income derived from returning these participation certificates to the fund and the earnings generated as a result of the valuation of these participation certificates
• Proceeds derived by corporations from the sale of their preferred shares, and profits derived by joint stock companies from
constant flat depreciation rate calculated by the following formula (flat rate = 1 / extended useful life).
The taxpayers may select the straight-line method or the decliningbalance method to calculate depreciation. A company may change from the declining-balance method to the straight-line method (but the reverse change is not permitted) at any time during the useful life of a fixed asset. A company may exercise this option on an asset-by-asset basis.
Fixed assets can be depreciated beginning in the year of capitalization (the year in which an asset becomes ready to use). For fixed assets that are purchased as ready to use, the depreciation begins in the year of the acquisition of the fixed asset. For fixed assets that need to be constructed or assembled, the depreciation begins in the year in which the construction or assembly is completed and the assets become ready to use.
In general, an asset qualifies for full-year depreciation in the year of capitalization, regardless of the date of capitalization. However, except for passenger cars subject to pro-rata depreciation, taxpayers are given the opportunity to depreciate on a daily basis from the date the assets are ready for use, for depreciable economic assets that are purchased after 26 October 2021. Depreciation for passenger cars begins in the month in which the cars are purchased. For example, if a passenger car that was purchased for TRY1,000 is depreciated using a straight-line depreciation rate of 20%, the regular depreciation for a full year is TRY200. Under the applicable rules, if such an automobile is acquired in November, tax-deductible depreciation for the year of acquisition is calculated as follows:
2 months 12 months x TRY200 = TRY33.33
The balance of the regular depreciation for the year of acquisition is deductible in the last year of depreciation of the asset, together with the regular depreciation for the last year.
Investment allowance. Effective from 1 January 2006, the investment allowance was abolished. However, companies can carry forward investment allowance amounts due on or before 31 December 2005.
Research and development and design expenditures. One hundred percent of R&D/design expenditures may be deducted from the tax base if certain conditions are fulfilled. This is an incentive that is granted in addition to the ordinary depreciation expense recognition of capitalized R&D/design expenditures. The incentive covers the following expenses:
• Raw materials and supplies’ expenses
• Personnel expenses
• General expenses
• Payments for benefits and services provided by outsourcing companies
• Taxes, duties and fees
• Depreciation and depletion
• Financial expenses
Companies that are not able to deduct R&D/design expenditures because of insufficient taxable income may deduct the unused amount in the following years.
In addition, to support R&D/design activities, the Turkish Scientific and Technological Research Institution (TUBITAK) may provide monetary aid to companies with respect to their R&D/design activities under certain conditions. The related law also provides various types of incentives such as R&D/design deductions, wage income withholding exemptions, social security premium support, stamp duty exemption and capital aid for technological enterprises.
Relief for losses. In general, losses may be carried forward for five years. Losses cannot be carried back. An order of priority applies for the use of losses and exemptions to offset taxable income for the year. Past years’ losses are used after exemptions that apply even in the event of a loss. After the losses are used, the other exemptions that apply in profitable years are administered (investment allowance, R&D/design deductions, tax-deductible donations and others).
Resident companies may deduct the losses incurred in business activities performed abroad if the foreign losses are approved by auditors authorized under the laws of the relevant jurisdiction. Foreign losses from foreign activities cannot be deducted if income arising from such activities is exempt from corporation tax in Türkiye.
D. Other significant taxes
The following table summarizes other significant taxes.
Nature
Value-added tax; imposed on goods delivered and services rendered, including imported goods and services, communications, conveyances by pipeline and certain leases; exports are exempt
on other items
Local withholding taxes, on amounts paid to nonresident corporations Various
Banking and insurance transactions tax; imposed on all types of payments received by banking and insurance companies with respect to all types of transactions, except financial
Special consumption tax; imposed on the delivery, importation or the initial acquisition of certain goods
Debt-to-equity rules. Under the new thin-capitalization rules, a “related party” is a person holding, directly or indirectly, at least 10% of the shares or voting rights of the other party.
Borrowings from related parties that exceed a debt-to-equity ratio of 3:1 are considered to be disguised capital. For borrowings from related parties that are banks or financial institutions, half of the borrowings are taken into consideration in performing the calculation for disguised capital. Total borrowings from all related parties are treated collectively.
The equity at the beginning of the taxpayer’s fiscal year applies for thin-capitalization purposes. Interest paid or accounted for and foreign-exchange differences related to disguised capital are regarded as nondeductible expenses in determining the corporate tax base. Interest related to disguised capital is treated as a dividend distribution and is subject to dividend withholding tax.
Controlled foreign companies. The controlled foreign company (CFC) rules apply if resident individuals and corporate taxpayers jointly or severally have a direct or indirect participation of 50% or more in the shares, dividend rights or voting rights in a foreign company that meets all of the following conditions:
• Twenty-five percent or more of the foreign company’s gross income is of a passive nature (portfolio investment income). If the business activities of the company are not commensurate with the capital, organization or the work force of the company, income derived from commercial, agricultural or independent personal services may be regarded to be of a passive nature.
• The foreign company is subject to effective corporate taxation at a rate of less than 10%.
• The gross revenue of the foreign company exceeds TRY100,000 (approximately USD5,300).
If the foreign company falls within the scope of the Turkish CFC measures, Turkish resident taxpayers declare corporate income of the foreign company attributable to them. In the event of a dividend distribution by the foreign company, the recipient of the dividend is taxed only to the extent that the amount has not been taxed in accordance with the CFC rules.
Ultimate Beneficial Owner declaration. It is compulsory to declare the individual(s) who ultimately control or have ultimate influence over the legal entities or the entities without legal status. This is known as the Ultimate Beneficial Owner (UBO) declaration.
As of 1 August 2021, corporation taxpayers and other types of companies (commandite companies (a type of partnership), trusts and similar institutions established in a foreign jurisdiction that have their headquarters in Türkiye with resident managers in Türkiye or with management centers in Türkiye) are required to declare UBO information.
In addition to those listed above, certain parties such as banks, payment agencies, financing and factoring companies, financial leasing companies, asset management companies, notary publics, lawyers, sworn-in financial advisors and certified public accountants, among others, are also required to declare UBO
information, related to the transactions that are performed by their clients, when requested by the Revenue Administration.
Entities considered to be UBOs and subject to declaration are described below.
The following are UBOs for legal entities:
• Individual shareholders with shares exceeding 25% of the legal entity
• If the individual shareholders holding more than 25% of the legal entity are suspected of not being the UBO or if there is no individual shareholder holding such shares, the individuals who have ultimate control of the legal entity
• If the UBO cannot be determined, the individuals with the highest managerial authority
The following are UBOs for entities that do not have legal status, such as business partnerships:
• Individual/s who have ultimate control
• If the UBO cannot be determined, the individual/s with the highest level of executive power
• For trust and similar institutions, those who have the title of founders, trustees, managers, auditors or beneficiaries, or those who have influence over these organizations
Corporation taxpayers must declare UBO information in their advance tax returns and annual corporation tax returns. Parties other than corporation taxpayers must declare their UBO information to the Turkish Revenue Administration via electronic forms by the end of August of every respective year. In cases in which the taxpayers have a new tax registration or if there is a change in the information previously reported, those changes must be declared within one month following the date of their occurrence.
All of the UBO documents and records must be kept for five years by the parties. The relevant penalties under the Turkish Tax Procedural Code are also applicable for parties who do not report the requisite information, or who make incomplete or misleading declarations.
Anti-avoidance measures. Turkish resident taxpayers are subject to a 30% withholding tax on all payments made in cash or on account that relate to transactions with companies resident in countries that the president considers to be in harmful tax competition. The president has not yet identified these countries. The principal, interest or profit contributions corresponding to debts to financial institutions established outside Türkiye and payments to insurance and reinsurance companies established outside Türkiye are not subject to the 30% withholding tax. The president has the authority to reduce the withholding tax rate to 0% for transactions that are considered to be performed at arm’s length.
The payments taxed in accordance with the rules described in the preceding paragraph are not subject to further corporate tax or income tax.
The Turkish tax law includes anti-abuse rules. The principal rule is the substance-over-form rule, which is contained in Article 3 of the Tax Procedural Law.
5/10/15 (rr) 10 (ss) 10
10 10 (cc) 10
Non-treaty jurisdictions 10 (pp) 20
(a) The 5% rate applies if the recipient owns more than 25% of the payer of the dividends. The 15% rate applies to other dividends.
(b) The 5% rate applies if the recipient owns more than 20% of the payer of the dividends or if the recipient is the central bank or an entity that is wholly owned by the government. The 10% rate applies to other dividends.
(c) The 10% rate applies if the recipient is a company (other than a partnership) that owns more than 25% of the payer of the dividends. The 15% rate applies to other dividends.
(d) The 5% rate applies to dividends distributed by Belgian companies. The 10% rate applies to dividends distributed by Turkish companies.
(e) The 15% rate applies if the recipient owns more than 25% of the payer of the dividends. The 20% rate applies to other dividends.
(f) The 5% rate applies to royalties paid for the use of industrial, commercial or scientific equipment. The 10% rate applies to other royalties.
(g) The 15% rate applies if the recipient owns more than 10% of the payer of the dividends. The 20% rate applies to other dividends.
(h) The 10% rate applies to interest on loans granted by banks and financial institutions. The 15% rate applies to other interest payments.
(i) The 10% rate applies to interest on loans granted by financial institutions. The 15% rate applies to other interest payments.
(j) The 10% rate applies to interest paid with respect to a loan or other debt claim with a term exceeding two years. The 15% rate applies to other interest payments.
(k) The 7% rate applies if the recipient owns more than 25% of the payer of the dividends. The 10% rate applies to other dividends.
(l) For Luxembourg recipients, the 10% rate applies if the recipient owns more than 25% of the payer of the dividends and the 20% rate applies to other dividends. For Turkish recipients, these rates are applied as 5% and 20%, respectively.
(m) The 10% rate applies to interest on loans with a term exceeding two years. The 15% rate applies to other interest payments.
(n) The 5% rate applies if the recipient owns more than 25% of the payer of the dividends. The 10% rate applies to other dividends.
(o) The 10% rate applies if the recipient owns more than 15% of the payer of the dividends. The 15% rate applies to other dividends.
(p) The 5% rate applies to dividends distributed by Dutch companies. The 10% rate applies to dividends distributed by Turkish companies if dividends received by Dutch resident companies from Turkish resident companies are not subject to tax in the Netherlands.
(q) The rate is 5% of the gross amount of the dividends if either of the following circumstances exists:
• The beneficial owner of the dividends is a company (other than a partnership) that holds directly at least 20% of the capital of the company paying the dividends and the dividends are exempt from tax in the other state.
• The dividends are derived by the government pension fund in the case of Norway or by the government social security fund in the case of Türkiye. The 15% rate applies to other dividends.
(r) The 7.5% rate applies to interest on loans paid by financial institutions. The 10% rate applies to other interest payments.
(s) The 5% rate applies to dividends to the extent they are paid out of profits that have been subject to tax as specified in the tax treaty and if the recipient owns more than 25% of the payer of the dividends. The 15% rate applies to other dividends.
(t) The 10% rate applies to interest on loans granted by banks. The 15% rate applies to other interest payments.
(u) The 10% rate applies to royalties paid for the use of, or the right to use, copyrights of literary, artistic or scientific works, including cinematographic films and recordings for radio and television. The 15% rate applies to royalties paid for patents, trademarks, designs or models, plans, secret formulas or processes, or for information concerning industrial, commercial or scientific experience.
(v) The 10% rate applies to interest on loans granted by banks, financial institutions and insurance companies. The 15% rate applies to other interest payments.
(w) The 12% rate applies if the recipient owns more than 25% of the payer of the dividends. The 15% rate applies to other dividends.
(x) The 5% rate applies if the recipient of the dividends is the government, a public institution wholly owned by the government or a political subdivision or local authority of the other contracting state. The 10% rate applies if the recipient owns more than 25% of the payer of the dividends. The 12% rate applies to other dividends.
(y) The 10% rate applies to interest derived from loans granted by financial institutions, such as banks, savings institutions or insurance companies. The 15% rate applies to other interest payments.
(z) The 5% rate applies if the recipient owns more than 25% of the payer of the dividends for an uninterrupted period of at least two years. The 15% rate applies to other dividends.
(aa) For Irish recipients, the 5% rate applies if the dividends are paid out of the profits that have been subject to tax in Türkiye and if the recipient owns more than 25% of the voting rights of the payer of the dividends. The 10% rate applies if the recipient owns more than 25% of the voting rights of the payer of the dividends, and the 15% rate applies to other dividends. For Turkish recipients, these rates are applied as 5%, 5% and 15%, respectively.
(bb) The 10% rate applies to interest received by financial institutions or paid with respect to loans or other debt claims with a term exceeding two years. The 15% rate applies to other interest payments.
(cc) Interest paid to the government and central bank is exempt.
(dd) A new treaty between Türkiye and Norway was signed on 15 January 2010. This new treaty is effective from 1 January 2012. Under the new treaty, the dividend withholding tax rate may be reduced to 5%. The withholding tax rate for interest ranges from 5% to 10%. The withholding tax on royalties is 10% if certain conditions are satisfied.
(ee) A new treaty between Türkiye and Finland, which was signed on 6 October 2009, is effective from 1 January 2013.
(ff) A treaty between Türkiye and Germany, which was re-signed by the countries on 19 September 2011, is effective retroactively from 1 January 2011.
(gg) Interest paid from Türkiye to the government of Brazil, the Central Bank of Brazil or the National Bank for Economic and Social Development (BNDES) is exempt from Turkish tax. Interest paid from Brazil to the government of Türkiye the Central Bank of Türkiye (Türkiye Cumhuriyet Merkez Bankasi) or the Turkish Export/Import Bank (Eximbank) is exempt from tax.
(hh) The tax rate is 15% of the gross amount of the royalties arising from the use of, or the right to use, trademarks. The rate is 10% of the gross amount of royalties in all other cases.
(ii) The rate is 5% of the gross amount of interest with respect to a loan or credit made, guaranteed or insured for the purpose of promoting exports by the Finnish Export Credit (FINNVERA) or similar Turkish public entities that have the objective of promoting exports. The rate is 10% of the gross amount of interest derived by banks. The rate is 15% of the gross amount of interest in all other cases.
(jj) The rate is 5% of the gross amount of the following types of interest:
• Interest paid to the government pension fund or the Norwegian Guarantee Institute for Export Credits (Eksportfinans ASA) if the interest is wholly or mainly passed on to the government of Norway under the 108 Agreement between Eksportfinans ASA and the government of Norway
• Interest paid to the Turkish social security fund or the Turkish Eximbank The rate is 10 % for interest paid to banks. The rate is 15% in all other cases.
(kk) For Swiss recipients, the rate is 5% if the beneficial owner of the dividends is a company (other than a partnership) that holds directly at least 20% of the capital of the company paying the dividends and if relief from Swiss tax is granted for such dividends through an abatement of the profits tax in a proportion corresponding to the ratio between the earnings from participations and total profits or through equivalent relief. The rate is 15% in all other cases for Swiss recipients. For Turkish recipients, the rate is 5% if the beneficial owner of the dividends is a company (other than a partnership) that holds directly at least 20% of the capital of the company paying the dividends. The rate is 15% in all other cases for Turkish recipients.
(ll) The rate is 5% for interest paid with respect to a loan or credit made, guaranteed or insured for the purpose of promoting exports by an Eximbank or a similar institution that has the objective of promoting exports. The rate is 10% in all other cases.
(mm) For Australian recipients, the 5% rate applies if the beneficial owner of the dividends is a company that owns directly more than 25% of the capital of
entered into force. The agreement generally applies from 7 October 2017 for criminal tax matters. For other tax matters, it applies in Türkiye from 1 January 2013 and in the Isle of Man from 1 April 2013. On 6 October 2017, the Exchange of Information Agreement between Türkiye and Guernsey entered into force. The agreement generally applies from 6 October 2017. The Exchange of Information agreement between Türkiye and Gibraltar entered into force on 15 February 2018. Negotiations are continuing on such agreements with the Bahamas and Barbados.
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) was signed by Türkiye on 7 June 2017. A Draft Law on the MLI was submitted to the Turkish Parliament Plan and Budget Committee on 2 June 2020, officially starting the ratification process of the MLI. On 3 October 2023, the legislative proposal on the approval of the MLI was renewed and resubmitted to the Grand National Assembly of Türkiye.
An investment protection agreement between Côte d’Ivoire and Türkiye entered into force on 30 August 2023. On 4 November 2022, the investment protection agreement between Rwanda and Türkiye entered into force. An investment protection agreement between China Mainland and Türkiye entered into force on 11 November 2020. On 30 December 2022, the investment protection agreement between Belarus and Türkiye entered into force.
An investment protection agreement between Georgia and Türkiye entered into force on 10 June 2021. An investment protection agreement between Türkiye and Uzbekistan entered into force on 9 July 2020. An investment protection agreement between Djibouti and Türkiye entered into force on 5 July 2020. An investment protection agreement between Türkiye and Zambia entered into force on 6 May 2020. An investment protection agreement between Kyrgyzstan and Türkiye entered into force on 18 March 2020. From this date, the new agreement replaces the investment protection agreement that was signed on 28 April 1992. An investment protection agreement between Montenegro and Türkiye entered into force on 17 March 2020. An investment protection agreement with Cameroon entered into force on 3 January 2019. An investment protection agreement with Korea (South) entered into force on 1 August 2018. An investment protection agreement between Türkiye and Mexico entered into effect on 17 December 2017. An investment protection agreement with Vietnam entered into force on 19 June 2017. An investment protection agreement with Gambia entered into force on 15 June 2017. An investment protection agreement with Slovak Republic entered into force on 11 December 2013.
On 12 December 2023, the Uruguayan Senate approved the investment protection agreement with Türkiye, which was signed on 23 April 2022. The National Assembly of Venezuela has approved the investment protection agreement with Türkiye, which was signed on 21 July 2023. On 17 June 2019, the Cambodian National Assembly approved the investment protection agreement between Türkiye and Cambodia, which was signed on 21 October 2018 and entered into force on 25 October
2022. On 6 September 2018, the Ukrainian parliament (Rada) passed a draft law ratifying the investment protection agreement between Türkiye and Ukraine, which was signed on 9 October 2017. On 25 April 2017, the Congress of Guatemala approved the investment protection agreement between Türkiye and Guatemala, which was signed on 21 December 2015. On 14 March 2017, the Council of Ministers of Mozambique approved the investment protection agreement between Türkiye and Mozambique, which was signed on 24 January 2017. Türkiye has ratified investment protection agreements with Azerbaijan, Bangladesh, Colombia, Congo (Democratic Republic of), Ghana, Guatemala, Kosovo, Mali, Moldova, Pakistan and Serbia.
Türkiye has signed investment protection agreements with Angola, Burkina Faso, Burundi, Chad, Guinea, the Hong Kong SAR, Kenya, Lithuania, Mauritania, the Palestinian Authority, Somalia and Tunisia.
Negotiations regarding investment protection agreements are continuing with Guinea and Paraguay.
On 23 January 2024, the Turkish parliament approved the amending protocol to the free-trade agreement, which was signed on 29 September 2022 with Malaysia. On 4 December 2023, Tunisia and Türkiye reached consensus on the revision to the free-trade agreement, which was signed on 25 November 2004. On 18 July 2023, United Kingdom and Türkiye agreed to start negotiations for the revision of the existing free-trade agreement. On 23 October 2023, a memorandum of understanding was signed with respect to the free-trade agreement between Ukraine and Türkiye which was signed on 3 February 2022. The free-trade agreement is not yet in force. The protocol to the existing freetrade agreement between Montenegro and Türkiye entered into force on 1 July 2022. The free-trade agreement between Türkiye and Jordan was terminated on 22 November 2018.
A Competent Authority Agreement (CAA) on the Automatic Exchange of Information (AEOI) between Latvia and Türkiye entered into force on 2 January 2019. A CAA on the AEOI between Norway and Türkiye entered into force on 30 December 2018. A CAA on the AEOI between Gibraltar and Türkiye entered into force on 15 February 2018. A CAA on the AEOI between Bermuda and Türkiye entered into force on 18 September 2013.
The decision on the “Approval of the Multilateral Competent Authority Agreement Regarding the Automatic Exchange of Financial Account Information with the Attached Declaration” was published in the Official Gazette, dated 31 December 2019.
On 22 November 2021, the Turkish Ministry of Treasury and Finance announced a Joint Statement of Türkiye and the United States regarding a compromise on a transitional approach to existing unilateral measures during the interim period before OECD Pillar One is in effect. Türkiye and the United States have agreed that the same terms of the Unilateral Measures Compromise will apply between Türkiye and the United States with respect to Türkiye’s DST and the United States trade actions regarding the DST. Accordingly, the Unilateral Measures Compromise described in the 21 October 2021 Joint Statement is