Paylaş: Introduction
Withholding Tax (WHT)
Rates and Applicability:
- Withholding tax (WHT) applies to certain types of income, including dividends, royalties, and interest payments made to non-residents. The standard WHT rate is 15%, but it can vary depending on double tax treaties (DTT) between Turkey and other countries.
- Turkey has signed numerous DTTs that can reduce or eliminate WHT on certain income streams.
Double Tax Treaties:
- Foreign investors should consult Turkey’s double tax treaties to determine their WHT obligations. These treaties prevent the same income from being taxed twice—once in Turkey and again in the investor’s home country.
Capital Gains Tax
Capital Gains on Property:
- Foreign investors who sell property in Turkey are subject to capital gains tax. If the property is held for less than five years, the capital gains tax will apply. However, gains from property sales after five years of ownership are exempt.
Capital Gains on Shares:
- Gains from the sale of shares or stakes in Turkish companies are also subject to capital gains tax. The tax rate can vary depending on the duration of ownership and the nature of the investment.
Stamp Duty
Applicable Documents:
- Stamp duty is levied on a wide range of legal documents, including contracts, leases, and company formation documents. The rate varies, but it typically ranges between 0.189% and 0.948% of the contract’s value.
Stamp Duty for Foreign Investors:
- Foreign investors should be aware of stamp duty obligations when entering into business agreements or registering their company. Stamp duty is usually paid when the relevant document is signed or submitted for registration.
Tax Incentives for Foreign Investors
Investment Incentive Program:
- Turkey offers an Investment Incentive Program aimed at foreign and local investors in priority sectors. Incentives include tax reductions, VAT exemptions, customs duty exemptions, and land allocation.
Technology Development Zones:
- Companies operating in Technology Development Zones or Free Zones benefit from significant tax advantages, including CIT exemptions and customs duty relief. These zones are ideal for foreign investors looking to invest in high-tech industries.
Recent Developments (2024)
Updated CIT Rate:
- In 2024, the CIT rate was increased to 23% as part of Turkey’s fiscal strategy to balance public finances while encouraging foreign investment through targeted incentives.
Digital Tax for Foreign Companies:
- Turkey introduced a digital services tax aimed at foreign companies that provide digital services in Turkey. The tax rate is 7.5%, and it applies to digital advertising, data services, and e-commerce platforms with significant revenue generated within the country.
Conclusion
Foreign investors in Turkey must navigate a complex but rewarding tax landscape. Understanding corporate income tax, VAT, withholding tax, and capital gains tax is crucial for ensuring compliance. Moreover, taking advantage of Turkey’s investment incentives can help reduce tax liabilities and increase the profitability of investments.
