Türkiye has signed double tax treaties with close to 90 countries. Treaties prevent the same income being fully taxed in two countries: they either give the taxing right to one country, or limit withholding rates and allow credit for tax paid in the other. The current list and treaty texts are published on the Revenue Administration's legislation pages.
Turkish taxes on payments abroad
When a company in Türkiye pays a person or company abroad, two taxes come up:
| Payment | Domestic withholding | VAT (reverse charge) |
|---|---|---|
| Dividends | 15% | — |
| Branch profit remitted to head office | 15% | — |
| Licence, royalty, software use rights | 20% | 20% (return No. 2) |
| Professional and consulting services | 20% | 20% |
| Interest on loans from foreign banks | 0% | — |
| Interest on loans from other non-residents | 10% | — |
| Rent on real estate | 20% | Depends |
Treaty rates: where a treaty applies, withholding is limited to the treaty rate (e.g. 5–15% on dividends, generally around 10% on interest and royalties; professional income may not be taxed in Türkiye if the recipient has no fixed base here). Each treaty has its own rates; check the relevant treaty before paying. Withholding calculator · Foreign advertising invoices
Condition: to benefit, the original or certified copy of the recipient's certificate of residence from its own tax authority, with a Turkish translation, must be obtained before payment. Without it, domestic rates apply.
VAT is outside treaties: for services bought from abroad, the Turkish buyer declares VAT and, if entitled, deducts it in the same month.
Income earned abroad
- Foreign tax credit: tax paid abroad is credited up to the Turkish tax on the same income; documents must be certified by the Turkish consulate in that country. Uncredited amounts can be carried forward for 3 periods.
- Foreign participation income: exempt from corporate tax under conditions (at least 10% holding, 1 year holding period, minimum tax burden, transfer to Türkiye).
- Construction and repair work abroad: income exempt if brought to Türkiye; losses from such work cannot be deducted from Turkish income.
Individual residence
A person domiciled in Türkiye or staying more than 6 months in a calendar year is a full taxpayer. For people resident in both countries, the treaty tie-breaker rules apply (permanent home, centre of vital interests, habitual abode, nationality). Taxation of wages
Permanent establishment
If a foreign company has a fixed place of business in Türkiye or a dependent agent concluding contracts on its behalf, profit attributable to it is taxed in Türkiye. This risk must be assessed separately for liaison offices and employment without a company. Branch and liaison office · Employment without a company
Social security agreements
Türkiye's social security agreements with many countries may let employees on temporary assignment stay insured in their home country. A certificate of coverage must be obtained before the assignment starts.
Common mistakes
- Requesting the certificate of residence after payment or relying on an expired one.
- Forgetting VAT on software and advertising bought from abroad.
- Calculating withholding on the net payment without grossing up (if the contract provides for a net payment, tax is calculated on the gross amount).
- Not obtaining consular certification for the foreign tax credit.
Sources
Income Tax Law No. 193 arts. 3–7, 94, 123; Corporate Tax Law No. 5520 arts. 5/1-b and h, 30, 33; VAT Law No. 3065 art. 9; Revenue Administration list of double tax treaties; social security agreements (SGK).