Finlexia is a globally recognized Turkish Accounting Firm with a long record of excellence and professional leadership in Istanbul, Turkey. Our Turkish accountants and our Turkish Tax Lawyers are prepared to handle your company’s need in Turkish Dividend Tax Law. Finlexia handles all kinds of accounting services required to run your company in Turkey. We offer the best accounting services, at competitive prices to foreign businessmen who already established or getting ready to establish a company in Turkey.
Our tax department is prepared to handle your company’s Turkish dividend tax law issues in 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.
Turkish Dividend Tax Law
The rate for dividend tax in Turkey is 15% for residents and non-residents (natural persons and legal entities) that receive dividends from companies incorporated in Turkey. The legal entities can be limited or full taxpayers according to the part of the income subject to taxation in Turkey. The limited ones will pay taxes, including dividend tax, for their income obtained in Turkey, while the full taxpayers are subject to taxation for their income gained all over the world.
Companies that have their main/registered office in Turkey are considered full taxpayers and this rule applies also for Turkish subsidiaries of foreign companies and the branches are limited taxpayers. The foreign companies that have economic activities in Turkey are limited taxpayers and they have to pay taxes on their income (dividends) obtained in Turkey.
Transfer of Dividends
The foreign companies are allowed to repatriate their profits and some limitations exist only for the companies monitored by entities such as Capital Market Board or the Banking Regulatory and Supervisory Board that approve the transfer of the dividends. The dividends can be transferred from Turkey to other countries according to the Foreign Direct Investment Law and the new Turkish Commercial Code.
Foreign companies pay a dividend tax lower than 15% if there are double taxation treaties already signed between their country of residence and Turkey. Until now, Turkey has signed over 70 double tax treaties. The dividend tax must be paid before the profits are repatriated. Therefore if the DTT dividend withholding tax rate is lower than the generic 15% rate, the DTT rate may apply.
There is no limitation for repatriation of profits unless the company is monitored by an upper supervisory body (such as the Capital Market Board or the Banking Regulatory and Supervisory Board), whose approval is required. After paying a 20% corporate tax, there is a 15% dividend withholding tax if the profit is distributed to local natural persons or foreign natural/legal persons.
Under the Turkish tax system, all taxable entities are subject to the same dividend withholding tax rate, which is 15% and is applied to profits after taxation. Favorable dividend withholding tax rates exist due to Turkey’s Double Taxation Treaties.
Foreign investors are free to transfer dividends to abroad in accordance with the Foreign Direct Investment Law. However, the Turkish Commercial Code legal reserve requirements must also be met. There are no restrictions with respect to dividend payments under the Foreign Exchange legislation, but the dividend withholding tax has to be paid before repatriation. This will be checked by the banks used for the transfer.
Tax Services in Turkey
Our accounting firm provides a wide range of services designed to provide effective tax compliance and advice, aiming to give your business a competitive advantage both in local and international context.
At Finlexia, we provide tax certification, audit and consultancy services on a local and global scale. Using our in-depth experience and knowledge, we are providing competitive analyses and alternative solutions to our clients while offering them services in terms of compliance to financial legislation.
Every day – somewhere in the world – tax regulations, rules, and treaties change. Strategies that reduced taxes yesterday may not work today. New opportunities to save money could be missed – especially as you enter new markets. The talented tax staff in your organization might not have time to keep up with each nuance. Your current tax advisor may think your company is too small for personal attention – or your advisor may be too small to serve you.
Successful companies consider tax implications before they make business decisions, so they do not pay more than their legal obligation. This makes international tax compliance, consulting, and structuring a crucial element in your global strategy.
Tax Law Services in Turkey
The accountant will prepare financial statements for tax return, make an audit, will be responsible for book-keeping and financial planning and other different accounting services. He can help you with services such as:
- Corporate tax consultancy
- Tax audits – Tax certification and other Sworn financial advisory services
- Tax and customs litigation
- Global compliance
- Human resources
- Legal services
- VAT advisory and VAT refunds
- Foreign trade, customs and indirect
- Tax Consultancy in transfer pricing
- Tax Due Diligence
- Expatriates Tax Consultancy
Turkish Accounting Services
After registering a new company in Turkey, you will need to hire an accountant in order to manage the financial issues and offer solutions to lower the costs for your business. A good accountant will help you save money and make your company more efficient in terms of costs. In a short time, if your company is managed well from all points of view, the profit will increase.
An experienced accountant knows all the rules and regulations related to your business activity and will offer you the best advice in order to protect your money. Before hiring an accountant, you should check if he/she is registered before an accounting body in Turkey, so you will be sure that he/she is a professional and you can trust him.
Reach us for Tax Services in Turkey
Since its foundation, Finlexia Turkish Accounting Firm has been the choice of numerous clients in Turkey. Thanks to its nationally recognized accountants and accounting services, our accounting firm is now one of the leading accounting firms in Istanbul, Turkey. You may reach our accountants and lawyers for Tax Services in Turkey by sending by sending an email or filling in Contact Form in Contact page.