Turkey-France Double Tax Treaty

Turkey and France signed their first double taxation agreement in 1987. The treaty was enforced by both countries two years later. The agreement covers the following taxes:

• -          the income and corporate taxes in France,
• -          the income and corporate taxes in Turkey.

Turkey has also included the taxes levied on the funds supporting the defense industry, the solidarity surcharge and the taxes applied to the funds supporting the development of vocational and technical training. The avoidance of double taxation also applies to other similar taxes levied in Turkey and France. 

Avoidance of double taxation between Turkey and France

The tax treaty between Turkey and France specifies that the avoidance of double taxation will occur by determining the fiscal residence of the taxpayer. The agreement covers both individuals and companies, which is why tax residency is determined based on where a French or Turkish citizen has a permanent place of residence, respectively a place of management in the case of management. The Turkey-France double taxation treaty also allows companies to establish permanent establishments. A site operated by a French company or a Turkish company in the other state is considered a permanent establishment provided that it carries out activities for more than 6 months in a calendar year.

Taxation under the Turkey-France double tax agreement

The Turkey-France double tax treaty provides for the following:

• -          alienation of movable or immovable property will be taxed in the country the property is situated in,
• -          business profits will be taxed only in the country the company is registered in, except for permanent establishments which will be taxed in the country the profits arise in,
• -          profits arising from international transportation activities will be taxed in the country they arise in.

The double tax treaty between Turkey and France also provides for reduced rates for the following:

• -          dividend payments will be taxed at rates varying between 10 and 15%,
• -          interest payments cannot exceed a 15% tax rate on the gross amount,
• -          royalties payments cannot exceed a 10% tax rate on the gross amount.

For complete information about the double tax convention with France, do not hesitate to contact our  company formation agents in Turkey.