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Corporate Taxes in Turkey

Company Formation & Governance
Corporate Taxes in Turkey, Turkish Law Firm Istanbul, Turkey

Turkey has one of the most competitive corporate tax rates in the OECD region. The Corporate Tax Law No. 5520 that was enacted on June 21, 2006 made some important amendments to the current applications and also included new concepts in the tax legislation. With the new Corporate Tax Law in place, Turkish corporate tax legislation now has noticeably clearer, more objective and better harmonized provisions which are in line with international standards.

The Turkish tax regime can be classified under three main headings:

Income Taxes

Income taxes in Turkey are levied on all income, including that of domestic and foreign individuals and corporations residing in Turkey. Non-residents earning income in Turkey through employment, ownership of property, business transactions, or any other activity which generates income are also subject to taxation, but only on the income earned in Turkey.

Corporate Income Taxes

In Turkey, the basic corporate income tax rate levied on business profits is 20%.

Withholding Taxes

Withholding taxes on selected payments of resident corporations:

  • Dividends are subject to 15%.
  • Interest on treasury-bill and treasury bonds derived by resident corporations is subject to 0%.
  • Interest on other bonds and bills derived by resident corporations is subject to 0%.
  • Bank deposits are subject to 10%-18% (for bank deposits opened after January 2, 2013).
  • Profit shares paid by participation banks in consideration of participation accounts are subject to 10%-18% (for participation accounts opened after January 2, 2013).
  • REPO agreements are subject to 15%.

Withholding taxes on selected payments of non-resident corporations:

  • Dividends are subject to 15%.
  • Interest on treasury-bill and treasury bonds derived by non-resident corporations is subject to 0%.
  • Interest on other bonds and bills derived by non-resident corporations is subject to 0%.
  • Bank deposits are subject to 10%-18% (for bank deposits opened after January 2, 2013).
  • Profit shares paid by participation banks in consideration of participation accounts are subject to 10%-18% (for participation accounts opened after January 2, 2013).
  • REPO agreements are subject to 15%.

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Since its foundation in 1992, Akkas & Associates Turkish Law Firm has been the choice of numerous clients in Istanbul, Turkey. Thanks to its nationally recognized company formation practice, our firm is now one of the leading law firms in Istanbul, Turkey. You may reach our accountants by sending an email to info@akkaslaw.com or through our Contact page.

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