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Tax Services 5502 Tax Services 5502

ITS Alert 5501 ITS Alert 5501




21-March-2011 Turkey welcomes new commercial code
9-Dec-2010 Turkey plans the most comprehensive tax amnesty ever
30-Nov-2010 Turkey increases inspections regarding intra-group services


Turkish courts rule on taxation of capital replenishment funds which are funds sent from shareholders resident abroad to local entities in order to comply with Article 324 of Turkish Commercial Code. A few years ago tax inspectors criticised these funds from the point of view of corporate tax, advance corporate tax and VAT.


Law No 6009 which became effective starting from 1 July 2010 fine tunes tax audits. Law is enacted in order to eliminate problems like lack of communication between different units of tax audit, conflicting results between tax rulings and reports.


On July 19 2009 governments of Canada and Turkey signed a tax treaty which is the first treaty concluded between two countries.


Austria and Turkey signed a tax treaty and accompanying protocol (the "treaty") on May 25, 2007, which entered into force on October 1, 2009. The provisions of the treaty took effect on January 1, 2010.


Turkey's new debt pushdown rules and a tax ruling issued about the deductibility of financial expenses for the loans obtained by a SPV for the acquisition of the shares of a state-owned electricity distribution company under the government privatization program.


On April 3 2010, Turkish Ministry of Finance announced a planned regulation change to the Income Tax Law in order to eliminate the taxation difference between Turkish residents and non-resident investors. The difference resulted from %0 withholding tax applied to non-residents on the capital gains derived from trading of government bonds, treasury bills and private sector bonds, income derived from mutual funds and profits derived from transactions in futures exchange markets.


On January 15, 2010 a new treaty was signed between the governments of Norway and Turkey.


Council of Ministers Resolutions no. 2009/15631 which decreases drug prices in Turkey significantly may adversely affect pharmaceutical companies whose transfer pricing policies are based on profitability analyses.


Tax inspectors put forward external pricing benchmarks for the active ingredients purchased from related parties on their continuing tax audits at pharmaceutical companies.


On 15 October 2009, the Constitutional Court of Turkey decided to cancel the income tax law provision which limited the time period for benefiting from carried forward investment allowances not used as of 31 December 2005, until the end of 2008,   finding this law provision inconsistent with the Turkish Constitution.


On September 30, 2009 a new protocol was signed between the governments of Luxembourg and Turkey which is the first protocol to amend the treaty signed in 2003.


Turkish government on June 4 announced a new incentive package designed to promote new investments and reduce the disparity between the economic development levels of different regions of Turkey.


On March 18, 2009, a new income tax treaty was signed between the governments of the Philippines and Turkey. This is the first treaty between the two countries.


Turkish tax authorities request transfer pricing documentation reports from taxpayers.


The 2008 tax treaty signed between Ireland and Turkey signed on October 24, 2008 was ratified by Ireland in December.


On October 6, 2009, the governments of Finland and Turkey signed a new income tax treaty and accompanying protocol.


Law 5811 published in the Official Gazette on 22 November 2008 and came into force on the same date aims to facilitate bringing in of certain unrecorded assets either located in or outside of Turkey owned by Turkish resident real and legal persons and exempt qualifying foreing sourced income of Turkish residents from taxation


On October 24, 2008, a new income tax treaty and accompanying protocol was signed between the governments of Ireland and Turkey.


Turkey is negotiating with Netherlands in order to make changes in Turkey-Netherlands DTT.


On May 22, 2008, the governments of Switzerland and Turkey signed an income tax treaty.


On March 28, 2008, the governments of Austria and Turkey signed an income tax treaty.


Turkish investors - both resident and nonresident- are awaiting a ruling by the Constitutional Court on whether an amendment to the law governing the application of the zero withholding rate for nonresidents is in violation of Turkey's Constitution.


The analysis of an increase in withholding tax due to new CIT Code, withholding tax on dividends under local regulation and under DTT's, beneficial ownership and substance over form concepts and new DTT signed between Spain and Turkey.


Communiquè No.1 of Corporation Tax Law 5520 clears way for interim dividend distribution.


Ministry of Finance issued Communiquè 263 in order to eliminate the requirement that nonresident investors with income from securities submit tax residency certificates.


On December 18, 2006, a new income tax treaty and accompanying protocol signed on May 11, 2005 between the governments of Portugal and Turkey entered into force.


On February 5, 2007 a revised version of Draft Communiquè Serial No. 263 was published. The revised draft Communiquè provides that nonresident corporations, regardless of investment fund status, are not required to submit a Certificate of Residence to obtain %0 withholding tax rate.


Communiqué Serial No. 258, which was published in the Official Gazette on September 30, 2006, requires non-resident investors seeking the 0% withholding tax rate applicable to capital gains and interest derived from shares, government and corporate bond interest, issued on or after January 1, 2006, to submit a Certificate of Residence.


New Turkish Corporate Tax Code enters into force on June 21.


Turkish President ratified a law that terminates Turkey's investment incentive allowance, establishes new personal income tax rates and amends the penalty for late payment or failure to pay taxes.


Temporary Article 67 was amended by Law 5436, which was promulgated in the Official Gazette on December 24, 2005. Temporary Article has effect from January 1, 2006 until December 31, 2015.


Prime Minister Erdogan announced on November 29 that the corporate tax rate will be reduced from 30 percent to 20 percent effective January 1, 2006.


A review to Turkey's efforts in 2004 to transform the country's tax law into a system that more closely follows EU and OECD standards.


Turkey's new participation and international holding regime implemented to increase foreign direct investments.


The Turkish government has sent a draft tax law to Parliament that intends to improve Turkey's competitiveness in the international business community. Law includes provisions about foreign dividends and branch profits, participation exemption, special tax incentives, mining activities, R&D incentives, exemption for education enterprises, tax amnesty for irregularity penalties, bookkeeping in foreign currency and internet tax return filings.


An English version of the new income tax treaty and accompanying protocol between the governments of Luxembourg and the Republic of Turkey, which were signed on June 9, 2003, were recently made available.


Turkey abolished as of January 1, 2004 10% "fund surtax" ("Gelir Vergisi ve Kurumlar Vergisi üzerinden Alınan Fon Payı") which was until December 31, 2003, deducted from income subject to corporate or shareholder level taxes.


An English  version  of  the  income  tax  treaty and  accompanying  protocol  between  the governments of Turkey and Spain, which were signed on July 5, 2002, was recently made available.


Turkish parliament has ratified new laws intended to broaden the tax base by reducing the size of the unrecorded economy, to lower the tax burden on low-income residents and to conform the tax system with OECD and EU norms.


Law 4842 fully integrated corporation tax and income tax and reduced the tax burden on distributed company profits.


Turkish parliament on April 9 ratified a new tax law that changes the investment tax allowance and dividend tax system.


Turkey has published a draft law on inflation accounting adjustments that seeks to avoid unfair taxation and increase tax burden.


With effect from August 18, 2001, new withholding tax rates will be applied to deposit interest opened or renewed on or after August 18, 2001.


A new income tax treaty and protocol, between the governments of Turkey and Singapore, entered into force on August 27, 2001. 


The "earthquake tax", which was imposed as a temporary measure to raise funds for Turkish earthquake relief purposes last year, will expire within the next few months.


Withholding tax rate changes were announced on August 25, 1999.


As part of the austerity measures introduced by the government, the Turkish Grand National Assembly on August 11, 1999, adopted a Tax Act that amends various articles of Turkish tax laws. The aim of the new rules is to reduce the tax burden on corporate taxpayers through the easing of the provisional corporate income tax rules, as well as extending the application period of tax-free asset/stock sale and/or asset/stock exchanges (with a taxfree step-up facility).