Numara : 1
Tarih : 23.1.2007
TAX NEWS
 

NO: 2007/1

 
     SUBJECT
Revision In The Turkish Withholding Tax Rates
 
 
The Council of Ministers has redetermined the  withholding tax rates on certain payments made to resident and non-resident corporations through the Decree numbered 2006/11447 effective from 1 January 2007. Accordingly, the new withholding tax rates compared to the previous rates are as follows:
 
Withholding Tax on:
Previous Rate
New Rate For Non-Residents
New Rate For Residents
Payments for petroleum exploration services
 
5%
 
5%
 
N/A
Other professional services
22%
20%
             N/A
Leasing payments under the scope of Turkish Financial Leasing Law
 
1%
 
1%
 
N/A
Rental payments
22%
20%
             N/A
Payments for the right of use of intangibles, patents, trademark , licenses etc.
 
22%
 
20%
 
N/A
Payments for the sale/transfer of copyrights, licenses, patents, trademark and other intangible rights
 
25%
 
20%
 
N/A
Interest payments for the credits granted by the foreign governments, international institutions and foreign banks
 
0%
 
0%
 
N/A
Other interest payments
10%
10%
             N/A
Profits gained from the business transactions in fairs and exhibitions
 
0%
 
0%
 
N/A
Payments for discount of bills
12%
10%
N/A
Progress payments for construction projects extending to more than years
 
5%
 
3%
 
3%
Rental payments to cooperatives for rental of immovable properties.
 
22%
 
N/A
 
20%

 
Please note that if there is a double tax treaty between Turkey and the nonresidents’ original state, and if the conditions in the treaty are satisfied, the lower rate in the treaty will be applicable. In addition to the redetermined withholding tax rates, the previously determined withholding tax rates for other types of payments continue to apply according to Decrees under the scope of Income Tax Code No. 193 and the Law No. 5422 provided that the legal limits specified in the new Corporate Income Tax Law are not exceeded, until new decrees are announced by the Council of Ministers. (New CIT Law Prov. Article No.1)
 
 
Please do not hesitate to contact us in case you need any further information.
 
 
Truly yours,
 
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