Turkey – Netherlands Double Taxation Treaty

Updated on Monday 18th April 2016

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The double taxation agreement (DTA) between Turkey and the Netherlands was signed in 1986 and it entered into force in September 1988. The treaty is still available, but the two states are planning to negotiate the terms of the agreement, as certain provisions are outdated. If you are interested in company formation in Turkey, our Turkish attorneys can provide you with information necessary for your business.

Taxes Covered by the Turkey – Netherlands Treaty

The agreement between the two countries covers several income taxes to which companies with operations in Netherlands and Turkey are subjected to. The income taxes may refer to the total income of a company or to parts of the income. The treaty signed in 1986 stipulates that taxes will be applied on the following:

• companies with operations in Turkey will be subjected to:

- income tax;

- corporation tax;

- levy of the fund for the support of the defense industry.

• companies with operations in the Netherlands will be subjected to:

- income tax;

- wages tax;

- company tax;

- dividend tax.

The taxes agreed upon by the contracting states differ as a result of the tax legislation in each country; the agreement stipulates, according to the Article 4, that “identical or similar taxes” are imposed by both governments. Our law firm in Turkey can offer you more information related to the subject.

Main Provisions of the Turkey – Netherlands Treaty

If you are interested in company formation in Turkey, you should take into consideration the following provisions:

• a permanent establishment represents a fixed place where the business operations are carried. This may be an office, a branch or a building and in case in which it represents a building site or an installation project, the activity must last longer than 6 months in order to be considered a permanent establishment;

• the income derived by a resident company in Netherlands carrying operations in Turkey may be taxed in Turkey, if the income is arising from the immovable property belonging to the company;

• dividends paid by a resident company of the Netherlands to Turkey can be taxed in Turkey; the dividends will be taxed at a rate of 15% or 20% of the gross amount of the dividends. Our attorneys in Turkey can offer you an in-depth presentation of the tax provisions stipulated in the treaty.

If you need further information on the company formation in Turkey and on the tax treaty provisions offered by the Turkey – Netherlands DTA, please contact our Turkish lawyers, who can offer you consultations and legal representation.

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