Does a Foreign Investor Pay Turkish Tax on Selling Shares in a Turkish Company?

When an investor treated as a non-resident taxpayer in Türkiye (dar mükellef) sells shares in a Turkish company, Turkish domestic law in principle allows the gain to be taxed in Türkiye: an individual pays income tax on it as a capital gain (değer artışı kazancı), and a foreign company pays corporate tax. The test for non-resident status differs for individuals and companies: an individual is a non-resident taxpayer if he or she is not considered settled in Türkiye, and a company is one if neither its legal seat nor its place of management is in Türkiye. Three factors decide the outcome: the type of interest sold (a quota in a limited company, joint stock company shares represented by share certificates, or joint stock company shares not represented by share certificates), how long it was held, and the double tax treaty between Türkiye and the seller’s country of residence. Under the treaties with Germany, the United Kingdom and the Netherlands, Türkiye’s taxing right depends mainly on a holding period of no more than one year (the Netherlands treaty adds further conditions). Below, the two cases are explained separately, using the 2026 rates and amounts.

Key Concepts

A non-resident taxpayer (dar mükellef) is a person or entity taxed only on income earned in Türkiye. The criteria are separate:

• Individuals: individuals who are not settled in Türkiye are non-resident taxpayers (GVK m. 6). A person whose domicile (ikametgâh) is in Türkiye, or who stays in Türkiye continuously for more than six months in a calendar year, is considered settled in Türkiye; temporary absences do not interrupt this period (GVK m. 4). Foreigners who come to Türkiye for a specific and temporary assignment or job, or for study, medical treatment, rest or travel, are not considered settled even if they stay more than six months (GVK m. 5).
• Companies: entities whose legal seat (kanuni merkez) and place of management (iş merkezi) are both outside Türkiye are non-resident taxpayers; if either is in Türkiye, the entity is a full taxpayer (tam mükellef) (KVK m. 3/1-2).

For Türkiye to tax a non-resident on a gain, that gain must count as “earned in Türkiye”. For capital gains, this means the transaction giving rise to the gain is performed in Türkiye or utilised in Türkiye; utilisation means that payment is made in Türkiye or, if payment is made abroad, that it is booked in the accounts of the Turkish payer or set aside from its profit (GVK m. 7/7 and final paragraph; for companies, KVK m. 3/4 refers to these provisions). This condition is usually met where the buyer is resident in Türkiye and pays the price from Türkiye. Where two foreign parties sign and pay abroad, the assessment must be made on the specific facts of the case.

Individual Investors Living Abroad

Which Gains Are Taxable

The Income Tax Law (Gelir Vergisi Kanunu, GVK) has two separate subparagraphs, depending on the type of interest:

• Joint stock company (anonim şirket, AŞ) shares represented by share certificates, as securities (menkul kıymet): Gains from the disposal of securities are capital gains (GVK mükerrer m. 80/1-1). The exclusion in this subparagraph requires two conditions together: the asset sold must be a share certificate (hisse senedi), and that share certificate must belong to a full taxpayer (tam mükellef) company. If share certificates meeting both conditions are sold after being held for more than two years, the gain is not a capital gain. The subparagraph also excludes securities acquired without consideration (for example by inheritance or gift). According to GİB private rulings (özelge), a temporary share certificate (geçici ilmühaber) is treated in the same way; the two-year period runs from the date the holder obtains the right of disposal over the share certificate (for certificates issued later, from the date they are issued). As of 9 November 2026, the statute shows no amendment to this subparagraph after Law No. 5281; the two-year period is in force.
• Quotas in a limited company (limited şirket, Ltd) and AŞ shares not represented by share certificates, as partnership interests (ortaklık hakkı): Gains from the disposal of partnership rights or interests are governed by a separate subparagraph, which contains no exemption linked to the holding period (GVK mükerrer m. 80/1-4). For this reason, a gain on the sale of a Ltd quota is taxable under domestic law regardless of how long the quota was held.

AŞ Shares Not Represented by Share Certificates

Shares in a joint stock company are not always represented by share certificates. According to a published GİB private ruling, the gain from selling an AŞ share for which no share certificate has been printed and which is not represented by a temporary share certificate is taxed as a capital gain under GVK mükerrer m. 80/1-4 without any time limit; the same ruling states that the annual capital gains exemption can be used for such sales (GİB private ruling, 17.05.2017, 16700543-120[17-515-89]-22798). If the shares are later represented by share certificates, the two-year period is counted from the date the certificates are issued, not from the company’s formation or the first acquisition of the share (GİB private ruling, 28.02.2017, 38418978-120[Mük80-16/14]-63676). Before selling an AŞ share, it should therefore be documented whether, and from what date, the share has been represented by a share certificate or a temporary share certificate. Private rulings bind the administration only towards the taxpayer who requested them; they are cited here to show the administration’s view.

Shares traded on Borsa İstanbul are taxed under the separate regime in GVK geçici m. 67 and are outside the scope of this article.

Computing the Gain and Indexation

The net capital gain is the sale price minus the acquisition cost of the interest and the selling expenses, taxes and fees borne by the seller (GVK mükerrer m. 81/1). The acquisition cost is increased by the rise in the index that the statute calls the “wholesale price index”, excluding the month of disposal; indexation applies only if the increase is 10% or more (GVK mükerrer m. 81). Today TÜİK (the Turkish Statistical Institute) publishes this index as the domestic producer price index (Yİ-ÜFE).

On the sale of shares acquired against capital brought into Türkiye in line with the foreign capital legislation, gains arising from exchange rate differences are, subject to certain conditions, disregarded in computing the capital gain (GVK mükerrer m. 81). One of the conditions is that the person’s Turkish income consists solely of investment income and capital gains from these shares.

Exempt Amount

A set amount of capital gains in a calendar year is exempt from income tax; however, gains from the disposal of securities and other capital market instruments are excluded from this exemption (GVK mükerrer m. 80/3). For 2026 the amount is TL 150,000 (Gelir Vergisi Genel Tebliği Seri No: 332, m. 3/2-h). Because the statute excludes only securities, the exemption can apply to the sale of a Ltd quota and of AŞ shares not represented by share certificates; it does not apply to the sale of AŞ shares represented by share certificates.

Filing, Deadline and Payment

Non-residents who are not required to file an annual return report gains from the disposal of movable property and rights within 15 days of the date the gain is earned, by filing a separate one-off return (münferit beyanname) with the tax office of the place where the property or rights were disposed of in Türkiye (GVK m. 101). The tax is paid within the filing period (GVK m. 120). The law does not require the buyer to withhold income tax from the share price (GVK m. 94 does not list this type of payment); the obligation lies with the seller.

2026 Income Tax Rates

The rate schedule for income earned in 2026 (income other than employment income) is as follows (GVK m. 103; Gelir Vergisi Genel Tebliği Seri No: 332, m. 3/3):

Foreign Corporate Investors

Special Return

For a foreign company with no permanent establishment or permanent representative in Türkiye, a gain on the sale of shares falls under “other income and earnings” (diğer kazanç ve iratlar) earned in Türkiye under the Corporate Tax Law (Kurumlar Vergisi Kanunu, KVK) (KVK m. 3/3-e). If the non-resident company’s taxable income consists only of such income, the foreign company, or the person acting on its behalf in Türkiye, reports the gain on a special return (özel beyanname) within 15 days of the date the gain is earned (KVK m. 26/1). The return is filed with the tax office of the place where the rights were disposed of in Türkiye (KVK m. 27), and the tax is paid within the filing period (KVK m. 29/1-c). Gains on the sale of shares are not among the payments to non-resident companies that are subject to withholding (KVK m. 30/1).

The corporate tax rate is 25% (KVK m. 32/1). As of 9 November 2026, the statute shows no provision changing this rate for the 2026 accounting period.

Participation Sale Exemption: 75% in the Statute, 50% in Practice

Under the text of KVK m. 5/1-e, 75% of the gain that companies derive from selling participation shares held on their balance sheet for at least two full years is exempt from corporate tax. The President is authorised to change this rate (KVK m. 5/2). Using this authority, Presidential Decision No. 9160 of 26.11.2024 (RG 27.11.2024, No. 32735) set the exemption rate at 50%; for sales made from 27.11.2024, the date the Decision was published, the rate applied is 50%. In short, the rate in the statute is 75%, and the rate applied to sales in 2026 is 50%.

The exemption requires the sale price to be collected by the end of the second calendar year after the year of sale, and the exempt amount to be kept in a special fund account under liabilities until the end of the fifth year. GİB states that all corporate taxpayers, including non-resident companies, can benefit from this exemption if they meet the required conditions; the law also deals with the case where the exempt amount is “transferred to the head office by non-resident companies”. However, the balance sheet holding condition and the fund account condition require books to be kept in Türkiye on a balance sheet basis. These conditions can be met by foreign companies whose shares are recorded on the balance sheet of a permanent establishment in Türkiye. No explicit administrative guidance was found on how a foreign company with no permanent establishment in Türkiye, which reports its gain on a special return, could meet these conditions; if the exemption is to be relied on in such a sale, the position should be assessed separately. If the exemption does not apply, the whole gain is taxed at 25% on the special return.

Tax Treaties: The Capital Gains Article

Double tax treaties (çifte vergilendirmeyi önleme anlaşmaları) take precedence over domestic law; if a treaty gives Türkiye no taxing right, the tax due under domestic law cannot be collected. To benefit from a treaty, the seller needs a certificate of residence. The Turkish texts of the three sample treaties below were read from the official texts published by the Revenue Administration (Gelir İdaresi Başkanlığı, GİB):

Many of Türkiye’s treaties contain a similar one-year rule, but the wording differs from treaty to treaty. For each transaction, the current text of the treaty with the seller’s country of residence, and of any protocol, must be read separately. Where Türkiye taxes the gain, the Turkish tax paid may be credited in the seller’s country under that country’s treaty and domestic rules (for example, Germany treaty Art. 22/2-b-dd).

Ltd Quota Transfers vs AŞ Share Transfers

The stamp duty and fee exemption does not cover the notary fee charged under the notary’s own fee schedule in a Ltd transfer; if the seller bears this fee, it can be deducted from the gain as a selling expense (GVK mükerrer m. 81/1). For changes to a company’s shareholding structure, see our page on share transfers in limited and joint stock companies. Distributing profits accumulated in the company before the sale is taxed separately; for this, see our article on dividend withholding tax for shareholders abroad.

Worked Examples (2026 Calendar Year)

Example 1: individual resident in Germany, Ltd quota. Assumptions: The quota was acquired in March 2025 for TL 1,000,000. In February 2026 it is sold to a Turkish-resident company for TL 3,000,000, and the price is paid from Türkiye. Because the holding period does not exceed one year, Türkiye may tax the gain under Germany treaty Art. 13/5. The index increase is assumed to be 20%, and the notary fee borne by the seller TL 30,000.

1. Indexed cost: 1,000,000 × 1.20 = TL 1,200,000 (indexation is allowed because the increase is above 10%).
2. Net capital gain: 3,000,000 − 1,200,000 − 30,000 = TL 1,770,000.
3. 2026 exemption: 1,770,000 − 150,000 = TL 1,620,000 tax base.
4. Income tax: TL 232,500 on TL 1,000,000 + (1,620,000 − 1,000,000) × 35% = 232,500 + 217,000 = TL 449,500.
5. One-off return and payment: within 15 days of the date the price is received.

Had the same quota been acquired in 2023, the holding period would exceed one year, so (provided the company is not property-rich) no Turkish tax would arise under the treaty.

Example 2: company resident in the Netherlands, Ltd quota. Assumptions: The foreign company has no permanent establishment in Türkiye. It held the quota for 8 months and sold it to a Turkish-resident company. The net gain is TL 2,000,000. Because the conditions of Netherlands treaty Art. 13/5 are met (a Turkish-resident buyer and a period not exceeding one year), Türkiye may tax the gain.

1. Participation sale exemption (75% in the text of KVK m. 5/1-e; 50% under Presidential Decision No. 9160 for sales from 27.11.2024): does not apply. The quota was held for eight months, so the condition of holding it on the balance sheet for at least two full years is not met; whether the rate is 75% or 50% therefore does not change the result.
2. Corporate tax: 2,000,000 × 25% = TL 500,000.
3. Special return and payment: within 15 days of the date the gain is earned.

Steps Before and After the Sale

1. Document the acquisition date and cost of the interest (capital payment receipts, the previous transfer agreement). For AŞ shares, also document whether, and from what date, the shares have been represented by share certificates or temporary share certificates.
2. Check the capital gains article and the protocol of the treaty with the seller’s country of residence; obtain a certificate of residence.
3. Assess whether the sale is performed in Türkiye and where the price will be paid (GVK m. 7/7).
4. For a Ltd transfer, apply for registration within 30 days with the notarised agreement, the shareholders’ resolution and the share register entry.
5. If tax arises, observe the 15-day filing and payment deadline; a tax identification number is required for the return.

For transactions with an international dimension, see our pages on international tax consultancy and, for filing procedures, preparation of tax returns.

For your company’s specific situation, you can write to us via our contact page.

Last legislation check: 9 November 2026 · Period covered: 2026 calendar year and 2026 accounting period