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Tax Advisory

International Tax Advisory

Applying double tax treaties, withholding tax and VAT on payments abroad, foreign-source income, controlled foreign corporations, and domestic and global minimum corporate tax obligations.

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Overview

International agreements duly put into effect have the force of law. (Constitution of the Republic of Türkiye, Art. 90) The Corporate Tax Law also reserves the provisions of international agreements with regard to exemptions, exclusions and deductions. (Corporate Tax Law No. 5520, Art. 35) For this reason, in a transaction with a party abroad, the withholding tax under domestic legislation is assessed together with the double tax treaty (çifte vergilendirmeyi önleme anlaşması) signed with the country in which the counterparty is resident.

To benefit from the treaty provisions, persons that are fully liable taxpayers in the other contracting state submit to the tax office, or to the withholding agent making the payment, the original certificate of residence (mukimlik belgesi) obtained from the competent authorities of their country of residence, together with a Turkish translation certified by a notary or by the Turkish consulate in that country. If the certificate cannot be submitted, domestic legislation applies instead of the treaty. (Circular ÇVÖA/2013-1)

KEYBIZ CPAs & Advisors handles the documentation, recording and filing of cross-border transactions: this covers checking treaties and certificates of residence, filing withholding tax and VAT (KDV) as a responsible party (sorumlu sıfatıyla), crediting taxes paid abroad and preparing minimum tax calculations. For related-party transactions, see our Transfer Pricing page; for the reporting set-up of group companies, see our Multinational Companies page.

Withholding Tax Rates on Payments to Non-Resident Corporations

Type of PaymentStatutory Rate (KVK Art. 30)Applied Rate (Decision)
Self-Employment Income15% (Corporate Tax Law No. 5520, Art. 30/1-b)5% on payments for oil exploration activities, 20% on other self-employment income payments. (Council of Ministers Decision No. 2009/14593)
Income from Immovable Capital (Including Rental of Intangible Rights, Licence Fees and Royalties)15% (Corporate Tax Law No. 5520, Art. 30/1-c) Consideration from the rental of rights such as trademarks, trade names, patents and copyrights is income from immovable capital. (Income Tax Law No. 193, Art. 70)1% on income from activities under Financial Leasing Law No. 3226, 20% on other such income. (Council of Ministers Decision No. 2009/14593)
Sale, Transfer and Assignment of Intangible Rights15% (Corporate Tax Law No. 5520, Art. 30/2) Applies regardless of whether the income is part of commercial or agricultural income.20% (Council of Ministers Decision No. 2009/14593)
Interest on Receivables of All Kinds15% (Corporate Tax Law No. 5520, Art. 30/1-ç)0% on interest on loans obtained from foreign states, international institutions, foreign banks and institutions customarily authorised to lend in their own country; 5% on deferred payment charges arising from the supply of goods; 10% on others. (Council of Ministers Decision No. 2009/14593)
Dividend Distribution15% (Corporate Tax Law No. 5520, Art. 30/3) Adding profit to capital is not deemed a profit distribution.15% on dividend payments made on or after 22.12.2024. (Presidential Decision No. 9286)
Payments to Corporations in Countries Announced by the President30% (Corporate Tax Law No. 5520, Art. 30/7) Applies regardless of whether the payment falls within the scope of the tax.The rate is set in the Law; the withholding applies to payments made to countries announced by the President. Transactions with persons in these countries are deemed related-party transactions for transfer pricing purposes. (Corporate Tax Law No. 5520, Art. 13/2)

The statutory rates are set out in KVK Art. 30. The President is authorised to reduce these rates to zero or to double them by income item and type of activity. (KVK Art. 30/8) The applied rates are set by Council of Ministers Decision No. 2009/14593 and the Presidential Decisions amending it; Presidential Decision No. 9707 changed only the rates for construction and repair works. If a double tax treaty is in force with the country to which the payment is made, the treaty may provide a lower rate; to benefit from that rate a certificate of residence is submitted, and if it cannot be submitted the domestic rate applies. (KVK Art. 35, Circular ÇVÖA/2013-1) GİB – Corporate Tax Withholding Rates (2026).

Transfer Pricing

VAT on Services Obtained from Abroad

Services performed in Türkiye or used in Türkiye are subject to VAT (KDV). If the service provider has no domicile, place of business, legal seat or business centre in Türkiye, the full VAT is declared and paid by the recipient using the service, as a responsible party, on VAT Return No. 2 (2 No.lu KDV Beyannamesi). The recipient does not need to be a VAT taxpayer. If the service is performed abroad and used abroad, no VAT is declared. (VAT Law No. 3065, Art. 6/b, 9; VAT General Implementation Communiqué I/C-2.1.2.1.1) For details, see our Indirect Taxes page.

Domestic and Global Minimum Corporate Tax

Domestic Minimum Corporate TaxDomestic and Global Minimum Top-Up Corporate Tax
Legal BasisCorporate Tax Law No. 5520, Art. 32/C; added by Law No. 7524.Corporate Tax Law No. 5520, Part Five, Additional Art. 1–13; added by Law No. 7524.
ScopeCorporate taxpayers. For corporations starting business for the first time, it does not apply for three accounting periods starting from the accounting period in which business commenced. (Corporate Tax Law No. 5520, Art. 32/C/5)Constituent entities of multinational enterprise groups whose annual consolidated revenue in the ultimate parent entity’s consolidated financial statements exceeded the Turkish lira equivalent of EUR 750 million in at least two of the four preceding accounting periods. (Corporate Tax Law No. 5520, Additional Art. 1)
CalculationThe calculated corporate tax cannot be less than 10% of corporate income before deductions and exemptions. This income is found by adding non-deductible expenses to the commercial balance-sheet profit; the exemptions and deductions listed in the Law (for example free zone income and R&D and design deductions) are deducted separately. (Corporate Tax Law No. 5520, Art. 32/C/1, 2, 6)The minimum corporate tax rate is 15%. If the jurisdictional effective tax rate falls below this rate, a top-up tax is calculated at the rate of the difference; the base is found by deducting the payroll- and tangible-asset-based exclusions from the jurisdictional income. (Corporate Tax Law No. 5520, Additional Art. 6, Provisional Art. 17)
Start of ApplicationIncome earned in 2025 and subsequent tax periods. (Law No. 7524, Art. 60/f)Income earned in 2024 and subsequent tax periods. (Law No. 7524, Art. 60/g)
Periods and FilingAlso applies to advance tax periods. (Corporate Tax Law No. 5520, Art. 32/C/4)The domestic minimum top-up corporate tax is declared and paid within the twelfth month following the month in which the accounting period ends; the global minimum top-up corporate tax and the information return by the last day of the fifteenth month. For the global tax and information return for the 2024 accounting period, the last day of the eighteenth month applies. (Corporate Tax Law No. 5520, Additional Art. 8, 10, Provisional Art. 17) For those whose accounting period is the calendar year, the deadline for the 2024 period was extended to 28 January 2026 for the domestic tax (VUK Circular 195) and to 31 July 2026 for the global tax (VUK Circular 203). For the 2025 period, the domestic tax is declared and paid by 31 December 2026, and the global tax and information return by 31 March 2027. (Corporate Tax Law No. 5520, Additional Art. 8, 10)

GİB – Filing and Payment Deadlines (2026). The Ministry of Treasury and Finance is authorised to set the procedures and principles for the filing and payment dates of these taxes.

Work Process for International Transactions

  1. Inventory of Cross-Border Transactions and Payments

    Payments made abroad and income earned from abroad during the period are listed by type and by the counterparty’s country.

    • Contracts and invoices
    • Counterparty’s country and name, and whether it has a place of business in Türkiye
    • Nature of the payment: service, licence, interest, dividend, price of goods
    • Certificate of residence and its Turkish translation, if any

  2. Checking the Treaty and Certificate of Residence

    It is determined whether a double tax treaty is in force with the counterparty’s country of residence and which article of the treaty covers the payment. If the certificate of residence cannot be submitted, domestic legislation applies. (Circular ÇVÖA/2013-1)

  3. Withholding Tax and VAT as a Responsible Party

    Those who withhold tax under KVK Art. 30 report these taxes to their tax office on the withholding return (muhtasar beyanname). (Corporate Tax Law No. 5520, Art. 31) VAT on services obtained from abroad and used in Türkiye is declared on VAT Return No. 2. (VAT General Implementation Communiqué I/C-2.1.2.1.1)

  4. Foreign Income and Tax Credit

    Corporate tax and similar taxes paid locally on income earned in foreign countries and transferred to the general result accounts in Türkiye can be deducted from the corporate tax calculated in Türkiye on that income. The amount deducted cannot exceed the amount found by applying the Turkish corporate tax rate to the foreign income; the part that cannot be deducted in that period can be deducted until the end of the third following accounting period. Taxes paid in a foreign country are evidenced by documents obtained from the competent authorities and certified by the local Turkish embassy or consulate. (Corporate Tax Law No. 5520, Art. 33/1, 4, 6)

  5. Controlled Foreign Corporation and Minimum Tax Calculations

    Foreign subsidiaries are reviewed every year against the controlled foreign corporation conditions. The domestic minimum corporate tax is also calculated in advance tax periods. The exemption for foreign participation income and foreign branch income is among the exemptions that cannot be deducted from the minimum corporate tax base. (Corporate Tax General Communiqué Serial No. 1, section 32.5.6)

Frequently Asked Questions

What Happens If a Certificate of Residence Is Not Provided?

If a person who is a fully liable taxpayer in the contracting state cannot submit a certificate of residence, domestic legislation applies instead of the relevant treaty provisions. The original certificate is given to the tax office, or to the withholding agent making the payment, together with a Turkish translation certified by a notary or by the Turkish consulate in that country. (Circular ÇVÖA/2013-1)

Who Pays VAT on a Service Obtained from Abroad?

For services performed in Türkiye by a firm that has no domicile, place of business, legal seat or business centre in Türkiye, or performed abroad and used in Türkiye, the full VAT is declared and paid by the domestic recipient using the service, as a responsible party. The recipient does not need to be a VAT taxpayer. (VAT Law No. 3065, Art. 6/b, 9; VAT General Implementation Communiqué I/C-2.1.2.1.1)

Can Taxes Paid Abroad Be Credited in Türkiye?

Yes, within the limits set by the Law. Corporate tax and similar taxes paid locally on foreign income can be deducted from the corporate tax calculated in Türkiye on that income; the deduction is limited to the amount found by applying the Turkish corporate tax rate to the foreign income, and the payment must be evidenced by certified documents. (Corporate Tax Law No. 5520, Art. 33)

When Does the Controlled Foreign Corporation Rule Apply?

The income of foreign subsidiaries that fully liable individuals and corporations control directly or indirectly by at least 50% is taxed in Türkiye, whether or not it is distributed, if 25% or more of the subsidiary’s gross revenue consists of passive income such as interest, dividends, rent and licence fees, if the subsidiary bears an income and corporate tax-like burden of less than 10% on its commercial balance-sheet profit, and if its total gross revenue exceeds the foreign currency equivalent of YTL 100,000 stated in the Law. (Corporate Tax Law No. 5520, Art. 7) Double tax treaties in force do not restrict the application of this provision. (Corporate Tax General Communiqué Serial No. 1, section 7.6)

Who Is Affected by the Domestic Minimum Corporate Tax?

For 2025 and subsequent periods, the calculated corporate tax cannot be less than 10% of corporate income before deductions and exemptions. Certain exemptions and deductions listed in the Law are deducted in this calculation; it does not apply for three accounting periods to corporations starting business for the first time. The President is authorised to reduce this rate to zero or to double it. (Corporate Tax Law No. 5520, Art. 32/C/7)

Which Groups Are Covered by the Global Minimum Top-Up Tax?

Multinational enterprise groups whose consolidated revenue exceeded the Turkish lira equivalent of EUR 750 million in at least two of the four preceding accounting periods are covered. The taxpayers of the domestic minimum top-up corporate tax are the constituent entities and joint ventures of these groups located in Türkiye. If one of the group’s Turkish taxpayers declares and pays the entire domestic tax, the others’ filing and payment responsibility ends; if the tax is not paid in full, joint and several liability continues. (Corporate Tax Law No. 5520, Additional Art. 1, 9, 10)

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