Taking dividends from a company: corporate tax, 15% withholding and the return
The tax cost of distributing a limited or joint stock company's profit to partners; withholding, the annual return, the half-exempt rule and alternatives for paying partners.
When a company makes a profit, getting it into the partner's pocket is taxed in two stages: first the company pays corporate tax, then withholding is deducted from the dividend.
Stage 1: Corporate tax
25% corporate tax is calculated on the company's taxable profit (30% for banks and some financial institutions). From the 2025 period there is also a domestic minimum corporate tax: tax cannot be less than 10% of corporate income before deductions and exemptions (with some exceptions). Corporate tax calculator
Stage 2: Dividend withholding
When after-tax profit is distributed to resident individual partners or partners abroad, 15% withholding is deducted (from 22.12.2024; previously 10%). The company withholds and pays it with the withholding return. No withholding applies to dividends paid to a resident company, and the receiving company applies the participation exemption.
Total burden: TRY 1,000,000 profit
| Amount | |
|---|---|
| Corporate income | TRY 1,000,000 |
| Corporate tax 25% | TRY 250,000 |
| Distributable profit | TRY 750,000 |
| Withholding 15% | TRY 112,500 |
| Received by the partner | TRY 637,500 |
| Total tax burden | 36.25% |
Stage 3: Annual return (if required)
An individual partner includes half of the dividend in the annual return (the other half is exempt). If total gross dividends exceed the TRY 22,000 filing threshold for 2026, a return is filed; the whole 15% withheld is credited against the tax calculated. If the partner has no other income, usually no or very little additional tax arises; high-income partners may owe more.
Alternatives
| Route | Company side | Partner side |
|---|---|---|
| Dividend | Not deductible; distributed after 25% corporate tax | 15% withholding, half in the return |
| Attendance fee / salary | Deductible, saving corporate tax | Wage brackets 15%–40%; no SGK for 4/b partners. Attendance fee |
| Rent (if the partner's property is leased to the company) | Deductible; 20% withholding | Declared as rental income |
| Partner current account | If the partner borrows from the company, interest must be charged; otherwise hidden profit distribution risk. Interest calculation | — |
Which route is better depends on the partner's other income, the company's profitability and cash needs. Tax advisory
Watch out
- Distribution requires a general meeting resolution; prior-year losses are offset first and the legal reserve is set aside.
- A partner withdrawing money without interest may be treated as a hidden profit distribution; a common audit finding.
- Withholding arises on the date the dividend is accrued (the resolution date), even if not yet paid.