Turkey – UK Double Taxation Treaty

The double taxation agreement (DTA) between Turkey and United Kingdom (UK) was signed 1986; it entered into force in October 1988 and it became effective in Turkey from 1 January 1989. The agreement stipulates provisions for the avoidance of double taxation and the prevention of fiscal evasion for companies with operations in these countries. If you are interested in company formation in Turkey, our Turkish lawyers can provide you with in-depth information about the laws available here. 

 

 

If you need tax details on company formation in Turkey you should know that the agreement signed by the two states covers the following taxes:

 

• income tax and corporate tax (for companies with operation in Turkey);

• the income tax, the corporate tax and capital gains tax (for companies with operations in United Kingdom).

 

 

Our Turkish lawyers can offer a detailed presentation on the provisions of the treaty, but the main ones that a foreign investor should be interested in, when he or she wants to set up a company in Turkey, are the following:

 

• the income derived by a resident of the UK carrying operations in Turkey can be taxed in Turkey as long as the income is arising from the immovable property of the company; under the provisions of the treaty, immovable property may refer to livestock, agriculture, natural resources, mineral resources; you can find out more on this subject from our attorneys in Turkey.

• dividends paid by a company resident in the UK to a resident of Turkey will be taxed in Turkey, but they can also be paid in the contracting state of which the company paying the dividends is a resident; dividends are taxed at a rate of 15% of the gross amount of the dividends, if the beneficial owner is represented by a company owning at least 25% of the voting rights in the company paying the dividends; for all other cases, dividends are taxed at a rate of 20%.

• interest and royalties that arise in UK and which are paid to a resident of Turkey can be taxed in Turkey; our Turkish lawyers can provide more details about the current rate at which interest and royalties are taxed. 

 

If you need further information on the company formation in Turkey and on the provisions from which your business may benefit, please contact our law firm in Turkey.