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Working in Turkey

Yes, as a foreigner you can establish a business in Turkey. It is irrelevant what nationality you are or your place of residence.

The major steps to establishing a limited company are;


- To prepare and notarize the articles of association
- Deposit 0.04% of the capital with your bank
- Register the company at the Trade Registry Office and the Chamber of Commerce

*The original and two notarized copies of the Articles of Association must be submitted to the Trade Registry Office within 15 days from the date of notarization together the documents listed in the Documentary Requirements section below .

*For Limited Companies, the Articles of Association must conform to Article 279 of the Turkish Commercial Code.

Please note; The articles of association are published in the Trade Registry Gazette. 



Once established, the company must be registered with the local tax office and after you will receive the companies ‘tax certificate’, which must be clearly displayed at the place of business.
You local tax officer will make a visit to your office or shop within a few days to verify this information.

The Registry Office will notify the 'Ministry of Labor and Social Security' of the incorporation and both the company and its employees must be registered with that administration. The company's registered address is stated in the articles of association and any changes must be registered.

The legal books of the company must be certified by a notary on the day the company is registered.

They are as follows;

The journal, ledger, case book and inventory.

Please note that a company in Turkey can be managed by foreign directors. (Work permits will be required) And there is no requirement to have a Turkish director.

Please note; foreigners can establish a Turkish company and own it as a full 100% shareholder.

Please see YellAli's guide to setting up a company in Turkey

Confused? Contact us for professional assistance



Turkish Residence Permit



Disclaimer: The information on this site is provided as a general guide. Information published to YellAli is confirmed by official government departments in Turkey. Whilst every effort is made to ensure that the site is up to date and accurate, information may be subject to change at any time. YellAli does not accept any responsibility or liability for inaccuracies in this information.



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As a foreigner there are only a few sectors in which you can work in. The main areas include teaching and tourism sectors and au pairs as well as large international companies or foreign embassies. These are jobs which welcome foreigners.

Working in Turkey is a very complex matter and very different to other countries. In order to work in Turkey you must first have been granted a permit to work in Turkey.

Foreigners are forbidden to work in legal or medical professions.

Read more about working in Turkey


Disclaimer: The information on this site is provided as a general guide. Information published to YellAli is confirmed by official government departments in Turkey. Whilst every effort is made to ensure that the site is up to date and accurate, information may be subject to change at any time. YellAli does not accept any responsibility or liability for inaccuracies in this information.



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Important Notice Foreigners applying for a 'first time' work permit must file an application in their own country to the Consulate of 
the Republic of Turkey. (Turkish Consulate)


You need to the following documentation in order to apply for a work permit at the Turkish Consulate/Embassy

• 1 copy of the work contract
• Foreign Personnel Application Form (Yabancı Personel Başvuru Formu)
• 6x Passport sized Photos (taken within the last six months)
• Translated & Notarised copy of passport


If you hold a valid residence permit that is valid for at least 6 months (except for residence permits granted for educational purposes) then you can apply directly to the Ministry of Labor and Social Security.

Types of work permit

There are four main working permits issued to foreigners:

Work permits for a definite period of time
This permit is typically issued for the duration of one year. After this time it can be extended by up to three years providing it is for the same job with the same employer. It is then possible to extend this permit for a further three years, valid for work with any employer provided the profession remains the same.

Under certain conditions the spouse and children of a foreigner legally employed in Turkey will be entitled to the fixed term work permit. They must have lived together consistently for at least five years.

Working permission for an indefinite period of time
This type of permit may be granted to those foreigners who have been residing in Turkey legally and uninterruptedly for at least eight years or have completed a total working period of six years in Turkey.

Independent Work Permit
An independent work permit is available to foreigners setting up a business operation, and have also lived consistently in Turkey for at least five years. They need to show that their business will create employment opportunities or contribute to local economic development. If they qualify, a Certificate of Application for Independent Work Permit is issued. This is valid for three months, during which time the business is set up and the trade register record submitted to the department.

Exceptional Cases
There are exceptional cases whereby a foreigner is automatically eligible for a work permit. Those Foreigners who are married to Turkish citizens is classed as an exceptional case. There are are over ten exceptional circumstances.


Need assistance with your work permit ? » Contact YellAli to complete the application on your behalf or email; permit@yellali.com


Notes:
It usually takes 6 weeks for the application to be processed. Upon the receipt of the approval of the Ministry for a work permit application, the applicant is immediately notified of the result and is required to come to the Consulate again with his passport to get the work visa that is the stamping of the work permit in his passport. Applicants who fail to ask for work visa within maximum 3 months after notification have to renew their applications. Issuing work visa takes maximum 3 working days and if the applicant cannot collect it in person, he can give a postal order to the Consulate so that the passport can be posted to him. Foreigners who enter Turkey on the basis of work visa are expected to get a residence permit within 30 day's of their entry.

Related Q & A's
» How much is a work permit?
» Which jobs are forbidden to foreigners in Turkey?
» Why are work permits so important in Turkey?
» Which sector is exempt from a Turkish work permit ?



Disclaimer: The information on this site is provided as a general guide. Information published to YellAli is confirmed by official government departments in Turkey. Whilst every effort is made to ensure that the site is up to date and accurate, information may be subject to change at any time. YellAli does not accept any responsibility or liability for inaccuracies in this information.



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WORK PERMIT FEES FOR 2016


WORK PERMIT DOCUMENTS GIVEN TO FOREIGNERS AMOUNT OF FEES (TL)
Work Permit for a definite time period
(The same fee amounts are necessary for time extensions)
Up to 1 year
(Including 1 year)
191,00
Up to 3 year
(Including 1 year)
575,40
Work Permit for an indefinite time period 959,80
Independent Work Permit 1921,10





For legal assistance with WORK PERMIT please contact us



Related Q&A's
» How do I apply for a work permit?


Disclaimer: The information on this site is provided as a general guide. Information published to YellAli is confirmed by official government departments in Turkey. Whilst every effort is made to ensure that the site is up to date and accurate, information may be subject to change at any time. YellAli does not accept any responsibility or liability for inaccuracies in this information.


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The working week in Turkey is approx. 45 hours. Most companies expect their employees to start work at 8.30 and finish at 17.00 / 17.30 - Monday to Friday.
However, depending on the job sector, some employers expect you to work much longer hours;
8:00 - 6:00 / 8:00 - 7:00.
Monday - Saturday.
Most employers provide lunch and hot drinks throughout the working day and break times average between 15 mins to 1 hour.


Disclaimer: The information on this site is provided as a general guide. Information published to YellAli is confirmed by official government departments in Turkey. Whilst every effort is made to ensure that the site is up to date and accurate, information may be subject to change at any time. YellAli does not accept any responsibility or liability for inaccuracies in this information.



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There are certain job sectors that foreigners can not do or obtain a work permit for in Turkey.

They are as follows;

Occupations prohibited to foreigners in Turkey

Diving, maritime navigation, working on ships, extracting wreckage, exportation of fish, other sea creatures, sand and pebbles Mining
Working as executive director in travel agencies
Professional occupations: midwife, dentist, vet, career, pharmacist, optician, executive director in hospitals, judge, lawyer, prosecutor, security guard, notary

Related Q & A's
How do I apply for a work permit?


Disclaimer: The information on this site is provided as a general guide. Information published to YellAli is confirmed by official government departments in Turkey. Whilst every effort is made to ensure that the site is up to date and accurate, information may be subject to change at any time. YellAli does not accept any responsibility or liability for inaccuracies in this information.



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If you own a limited company in Turkey you are obligated to pay your Bağkur insurance premium for ALL directors and employees of your company.
The cost is approximately 365 TL per month and starts from the day your company is formed.

Your company accountant should arrange all the paper work for you. But if for any reason they haven't registered you for Bağkur, you will still have to pay a backdated amount from the date your company was established (or when you where first added as the company shareholder / director)

Please note: If you have any outstanding debt with your current Bağkur insurance, you will not be allowed to use this insurance at any hospital until the debt is paid. However, any dependants under the age of 18 can use your Bağkur insurance. (provided they are registered on your policy)

Bağkur debt is not a criminal offence and you are not required by law to pay the whole outstanding debt at once.



Disclaimer: The information on this site is provided as a general guide. Information published to YellAli is confirmed by official government departments in Turkey. Whilst every effort is made to ensure that the site is up to date and accurate, information may be subject to change at any time. YellAli does not accept any responsibility or liability for inaccuracies in this information.



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Categories exempted from work permit are listed as below

Foreigners going to Turkey for scientific, cultural and artistic activities for a period not exceeding 1 month and for sports activities for a period not exceeding 4 months,

Foreigners going to Turkey for the installation and maintenance of imported machinery and devices, for the training and the delivery of such or the repair of devices broken in Turkey, for a period not exceeding 3 months after entry, provided that the situation is supported with relevant documentation,

Foreigners going to Turkey for the training of the goods and services exported to and from Turkey, for a period not exceeding 3 months after entry, provided that the situation is supported with relevant documentation,

Foreigners going to Turkey to work in fairs or circuses outside the scope of certified tourist facilities, for a period not exceeding 6 months after entry, provided that the situation is supported with relevant documentation,

Foreigners going to Turkey to gain knowledge and experience in public institutions or universities for a training period not exceeding 2 years, provided that the situation is supported with relevant documentation,

Foreigners who are reported by the relevant authorities to provide contribution to socio-cultural, technological and educational areas for a period not exceeding 6 months,

Foreigners going to Turkey within the scope of programs carried out by the Head of European Union Education and Youth Programs Centre called National Agency for a period limited by the duration of the program,

Foreigners going to Turkey for work experience within the framework of international student exchange programs, the duration and scope of which will be jointly determined by the the Turkish Departments of Labour and Social Security, Home Affairs, Foreign Affairs and the Higher Educational Board.

Foreigners going to Turkey as tour operators for a period not exceeding 8 months after entry,

Foreign footballers, other sports people or trainers who have been approved by Turkish Football Federation or the General Directorate of Youth and Sports, for a period limited by the duration of their contracts,

Foreign Ship men to work on ships registered with the Turkish International Ships Registrar to work outside the cabotage line and having the certificate of approval from relevant authorities in line with bilateral protocols concluded with other states on the basis of Provision I/10 of the International Convention on the Training, Certification and Working Shift Standards,

Foreign experts posted to Turkey to work in projects within the framework of Financial Cooperation Programs between Turkey and EU, for a period limited by the duration of their posting.




Disclaimer: The information on this site is provided as a general guide. Information published to YellAli is confirmed by official government departments in Turkey. Whilst every effort is made to ensure that the site is up to date and accurate, information may be subject to change at any time. YellAli does not accept any responsibility or liability for inaccuracies in this information.



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A) DIRECT TAXES

The Turkish taxation system contains two main direct taxes;
income tax and corporate tax.

Individuals are subject to income tax on their income and earnings. Companies are subject to corporate tax on their income and earnings.

1) INCOME TAX

a) Taxation of Income
Income tax is levied on the income of individuals. Partnerships are not accepted separately and each partner is taxed individually on their shares. An individual’s income may contain one or more of the income items listed below:

  • Business profits
  • Wages and salaries
  • Income from independent professional services
  • Agricultural incomes
  • Income from immovable property and rights (rental income)
  • Income from movable property (income from capital investment)
  • Other income and earnings without considering the source of income
  • b) Tax Liability
    An individual who is a resident of Turkey is liable to pay for his income worldwide; meaning unlimited liability. A person who stays in Turkey more than six months in a (calendar year) is accepted as a resident of Turkey. On the other hand, a person who stays in Turkey for six months or more for a specific job, business or special purpose is not as a resident. For this reason unlimited tax liability is not applied to them.

    c) Income Types

    • Business profits
    • An individual needs to have a permanent establishment or representative in Turkey, income must be    earned through the business and carried out by the establishment or representatives. The taxable income of a business enterprise is the difference between its net assets at the beginning and at the end of a calendar year.
    • Wages and salaries
    • Employees are subject to income tax. The income contains employee’s salaries and wages as well as associated supplementaries such as allowances, bonuses, commissions, premiums, compensations, etc. They are all subject to income tax.

    Income tax rates applied for wages and salaries are as follows:
    15% up to   10,000 TL
    20% up to   25,000 TL
    27% up to   88,000 TL
    35% more than 88,000 TL

    • Income from independent professional services
      Independent professional services means the activity which is done by a person who is self-employed. It includes services of lawyers, doctors, accountants, consultants and engineers. These independent professionals need to get an the “acceptance certificate” for their degree obtained abroad from an the Turkish  Council of Higher Education.
    • Agricultural incomes
      Income derived from agricultural activities are subject to income tax. It contains activities are done on which land, sea, rivers and lakes in forms of cultivating, planting, breeding, fishing, hunting, etc
    • Income from immovable property
    • Immovable property includes land, buildings and permanent leaseholders rights. Trucks, boats, aircrafts and other transportation vehicles are accepted as immovable property. Rental income from them is subjected to income tax.
    • Income from movable property
    • Interest, dividend, rent, capital in cash, capital in kind are included in income from movable property and are subjected to income tax.
    • Other income and earnings

    2)  CORPORATE TAX

        a) Taxation of Income
    Corporate tax is levied on the income and earnings arising from corporation activities.   Companies which are subject to corporate tax are listed below:

    • Capital companies and similar companies
    • Public enterprises
    • Cooperatives
    • Enterprises owned by foundations, societies and associations
    • Joint ventures

        b) Tax Liability
    Corporations, which have their legal headquarters located in Turkey or effective management placed in Turkey, are taxed on their income worldwide. They are subjected to unlimited liability.

        c) Net Taxable Income
    Net income is defined as the difference between the net worth of an asset owned at the beginning and end of a fiscal year. Expenses in Income Tax Law article 40, are allowed to be deducted from revenue. The following expenses may also be deducted in order to determine the tax base:

    • Expenses related to the issuance of stock and shares
    • Initial organization and establishment expenses
    • Expenses incurred for general board meetings, expenses made during mergers, dissolutions and liquidations
    • In the case of insurance companies, technical reserves required for the insurance contract still valid at date of inventory
    • Profit shares accrued to partners by participation banks for participation accounts
    • Profit shares accrued to active partners of partnerships in commendams limited by shares
    • Research and development deductions calculated as 40% of new technology and the research expenses realized within business

         d) Corporate Tax Return
    Every taxpayer must file only one tax return, including corporations. The corporate tax return must be filed by the 25th of the fourth month following the end of the fiscal year and assessed taxes are paid until the end of that month.
    In Turkey the corporate tax rate is 20% of corporate earnings.

    B) INDIRECT TAXES

  • Value Added Tax (VAT)
    In Turkey, VAT is the most important indirect tax. VAT is levied on the supply and importation of goods and services. VAT is applied in different rates of 1%, 8% and 18%.  The payment of VAT is made by the 26th of the following month after the current month.
  • Stamp Tax
    Stamp tax is applied for documents such as agreements, contracts, financial statements, payroll, letter of guarantee, etc. Stamp tax is levied as a percentage of value on the documents.
  • Motor Vehicle Tax
  • Banking and Insurance Transactions Tax
  • Property Tax
  • Communication Tax
  • Customs Tax
  • Inheritance Tax
  • Gambling Tax
  • Special Consumption Tax


  • Original Source: http://www.ozbekcpa.com/en/law/tax-system-in-turkey

    The above Guide was written and produced by OzbekCPA - (Partner of YELLALI)

    (i) If you would like to speak to an advisor about Tax Systems or Establishing a Company, please contact us ozbek@yellali.com

    About OzbekCPA - Based in Istanbul, Turkey OzbekCPA was founded in 2002 to offer accounting, financial consultancy, auditing, company formation, tax advisory and investment advisory services to the whole of Turkey. Our approach is to provide financial and management guidance, as well as direction for our clients by expanding their knowledge base regarding their operation in Turkey.

    Important (All Copyright is protected and owned by OzbekCPA - This content may NOT be copied & distributed by another third party)




    Disclaimer: The information on this site is provided as a general guide. Information published to YellAli is confirmed by official government departments in Turkey. Whilst every effort is made to ensure that the site is up to date and accurate, information may be subject to change at any time. YellAli does not accept any responsibility or liability for inaccuracies in this information.



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    UK/TURKEY DOUBLE TAXATION AGREEMENT
    SIGNED 19 FEBRUARY 1986
    Entered into force 26 October 1988
    Effective in United Kingdom from 1 April 1989 for
    corporation tax and from 6 April 1989 for income tax and capital gains tax
    Effective in Turkey from 1 January 1989
    Double Taxation Agreements are reproduced under the terms of Crown Copyright Policy Guidance issued by HMSO.
    CONTENTS
    Article 1 (Personal scope).........................................................................................3
    Article 2 (Taxes covered)..........................................................................................3
    Article 3 (General definitions)..................................................................................4
    Article 4 (Residence).................................................................................................5
    Article 5 (Permanent establishment).........................................................................6
    Article 6 (Income from immovable property)...........................................................8
    Article 7 (Business profits)........................................................................................9
    Article 8 (International transport).............................................................................9
    Article 9 (Associated enterprises)...........................................................................10
    Article 10 (Dividends).............................................................................................10
    Article 11 (Interest).................................................................................................12
    Article 12 (Royalties)..............................................................................................13
    Article 13 (Capital gains)........................................................................................14
    Article 14 (Independent personal services).............................................................15
    Article 15 (Dependent personal services)...............................................................16
    Article 16 (Directors' fees)......................................................................................16
    Article 17 (Artistes and athletes).............................................................................16
    Article 18 (Pensions)...............................................................................................17
    Article 19 (Government service).............................................................................17
    Article 20 (Students, apprentices and trainees).......................................................18
    Article 21 (Teachers)...............................................................................................18
    Article 22 (Other income).......................................................................................19
    Article 23 (Elimination of double taxation)............................................................19
    Article 24 (Non-discrimination)..............................................................................20
    Article 25 (Mutual agreement procedure)...............................................................21
    Article 26 (Exchange of information).....................................................................22
    Article 27 (Diplomatic agents and consular officers).............................................22
    Article 28 (Entry into force)....................................................................................23
    Article 29 (Termination).........................................................................................23
    AGREEMENT BETWEEN THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE REPUBLIC OF TURKEY FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL GAINS
    The United Kingdom of Great Britain and Northern Ireland and the Republic of Turkey; Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains: Have agreed as follows:
    ARTICLE 1
    Personal scope
    This Agreement shall apply to persons who are residents of one or both of the Contracting States.
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    ARTICLE 2
    Taxes covered
    (1) This Agreement shall apply to taxes on income and on capital gains imposed by either Contracting State irrespective of the manner in which they are levied. (2) There shall be regarded as taxes on income and on capital gains all taxes imposed on total income, on total capital gains, or on elements of income or of capital gains, including taxes on gains from the alienation of movable or immovable property, as well as taxes on capital appreciation. (3) The existing taxes which are the subject of this Agreement are:
    (a) in the Republic of Turkey:
    (i) the income tax; and
    (ii) the corporation tax;
    (hereinafter referred to as "Turkish tax");
    (b) in the United Kingdom of Great Britain and Northern Ireland:
    (i) the income tax;
    (ii) the corporation tax; and
    (iii) the capital gains tax:
    (hereinafter referred to as "United Kingdom tax").
    (4) This Agreement shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of this Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of changes which have been made in their respective taxation laws.
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    ARTICLE 3
    General definitions
    (1) For the purposes of this Agreement, unless the context otherwise requires:
    (a) the term "Turkey" means the territory of the Republic of Turkey, and any area in which the laws of Turkey are in force, as well as the Continental Shelf over which Turkey has, in accordance with international law, sovereign rights to explore and exploit its natural resources;
    (b) the term "United Kingdom" means Great Britain and Northern Ireland, including any area outside the territorial sea of the United Kingdom which in accordance with international law has been or may hereafter be designated, under the laws of the United Kingdom concerning the Continental Shelf, as an area within which the rights of the United Kingdom with respect to the sea bed and sub-soil and their natural resources may be exercised:
    (c) the term "national" means:
    (i) in relation to Turkey, any individual possessing Turkish nationality in accordance with the Turkish Nationality Code: and any legal person, partnership or association deriving its status as such from the law in force in Turkey;
    (ii) in relation to the United Kingdom, any British citizen or any British subject not possessing the citizenship of any other Commonwealth country or territory, provided he has the right of abode in the United Kingdom: and any legal person, partnership, association or other entity deriving its status as such from the law in force in the United Kingdom;
    (d) the terms "a Contracting State" and "the other Contracting State" mean Turkey or the United Kingdom as the context requires:
    (e) the term "tax" means any tax covered by Article 2 of this Agreement:
    (f) the term "person" comprises an individual, a company and any other body of persons;
    (g) the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes:
    (h) the term "registered office" in relation to Turkey means the legal head office registered under the Turkish Code of Commerce;
    (i) the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State:
    (j) the term "international traffic" means any transport by a ship, an aircraft or a road vehicle operated by an enterprise of a Contracting State, except when the ship, aircraft or road vehicle is operated solely between places in the other Contracting State:
    (k) the term "political subdivision" in relation to the United Kingdom, includes Northern Ireland;
    (l) the term "competent authority" means, in the case of Turkey the Minister of Finance and Customs or his authorised representative, and in the case of the United Kingdom the Commissioners of Inland Revenue or their authorised representative.
    (2) As regards the application of this Agreement by a Contracting State any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of this Agreement.
    Back to contents
    ARTICLE 4
    Residence
    (1) For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, registered office, place of management or any other criterion of a similar nature.
    (2) Where by reason of the provisions of paragraph (1) of this Article an individual is a resident of both Contracting States, then his status shall be determined as follows:
    (a) he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (centre of vital interests);
    (b) if the Contracting State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode:
    (c) if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national:
    (d) if he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
    (3) Where by reason of the provisions of paragraph (1) of this Article a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated. However, where such a person has the place of effective management of its business in one of the Contracting States and the place of its registered office in the other Contracting State, then the competent authorities of the Contracting States shall determine by mutual agreement the Contracting State of which the company shall be deemed to be a resident for the purposes of this Agreement.
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    ARTICLE 5
    Permanent establishment
    (1) For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on. (2) The term "permanent establishment" shall include especially:
    (a) a place of management:
    (b) a branch;
    (c) an office;
    (d) a factory;
    (e) a workshop;
    (f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources;
    (g) an installation or structure used for the exploration or exploitation of natural resources.
    (3) A building site or a construction, assembly or installation project constitutes a permanent establishment only if it lasts more than six months. (4) Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include:
    (a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;
    (b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;
    (c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise:
    (d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or of collecting information, for the enterprise:
    (e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character;
    (f) the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e) of this paragraph, provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.
    (5) Notwithstanding the provisions of paragraphs (1) and (2) of this Article, where a person -other than an agent of independent status to whom paragraph (6) applies -is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting State in respect of any activities which that person undertakes for the enterprise, if such a person:
    (a) has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph (4) which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph: or (b) has no such authority but habitually maintains in that first-mentioned Contracting State a stock of goods or merchandise belonging to
    the enterprise from which he regularly delivers goods or merchandise on behalf of the enterprise.
    (6) An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. (7) The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.
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    ARTICLE 6
    Income from immovable property
    (1) Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State. (2) The term "immovable property" shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, fisheries, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources: ships, boats and aircraft shall not be regarded as immovable property. The term shall not, however, include any property or rights income from which is a royalty as defined in paragraph (3) of Article l2 of this Agreement. (3) The provisions of paragraph (1) of this Article shall apply to income derived from the direct use, letting, or use in any other form of immovable property. (4) The provisions of paragraphs (1) and (3) of this Article shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent services.
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    ARTICLE 7
    Business profits
    (1) The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is directly or indirectly attributable to that permanent establishment. (2) Subject to the provisions of paragraph (3) of this Article. where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. (3) In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. No deductions shall be allowed for sums which are paid (other than the reimbursement of expenses actually incurred) by the permanent establishment to the head office or any other office of the enterprise as royalties, fees or other similar payments in respect of the use of licences, patents or other rights, as commission for services rendered or for management, or, except in the case of a banking enterprise, as interest on sums loaned to the permanent establishment. (4) No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. (5) Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.
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    ARTICLE 8
    International transport
    (1) Profits derived by an enterprise of a Contracting State from the operation of ships. aircraft or road vehicles in international traffic shall be taxable only in that State. (2) The provisions of paragraph (1) of this Article shall also apply to profits derived from the participation in a pool, a joint business or an international operating agency.
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    ARTICLE 9
    Associated enterprises
    (1) Where:
    (a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or
    (b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State,
    and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. (2) Where a Contracting State includes in the profits of an enterprise of that State and taxes accordingly -profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned Contracting State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other Contracting State shall make an appropriate adjustment to the amount of the tax charged therein on those profits, where that other Contracting State considers the adjustment justified. In determining such adjustment, due regard shall be had to the other provisions of this Agreement and the competent authorities of the Contracting States shall if necessary consult each other.
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    ARTICLE 10
    Dividends
    (1) Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. (2) However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the law of that State: but where the beneficial owner of the dividends is a resident of the other Contracting State the tax so charged shall not exceed:
    (a) 15 per cent of the gross amount of the dividends if the beneficial owner is a company which controls directly or indirectly at least 25 per cent of the voting power in the company paying the dividends:
    (b) 20 per cent of the gross amount of the dividends in all other cases.
    (3) The term "dividends" as used in this Article means income from shares, jouissance shares or jouissance rights, founders' shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights assimilated to income from shares by the taxation law of the State of which the company making the distribution is a resident and also includes any other item (other than interest relieved from tax under the provisions of Article 11 of this Agreement) which, under the law of the Contracting State of which the company paying the dividend is a resident, is treated as a dividend or distribution of a company. (4) Notwithstanding the other provisions of this Agreement, where a company which is a resident of a Contracting State, having a permanent establishment in the other Contracting State, derives profits through that permanent establishment, such profits may be taxed (in addition to the tax which would be chargeable on those profits if they were the profits of a company which was a resident of that other Contracting State) in accordance with the laws of the other Contracting State but the rate of tax so imposed shall not exceed 15 per cent of the amount of the profits. (5) The provisions of paragraphs (1) and (2) of this Article shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or, in the case of a resident of Turkey, performs in the United Kingdom independent personal services from a fixed base situated in the United Kingdom, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14 of this Agreement, as the case may be, shall apply. (6) Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company. except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in that other State.
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    ARTICLE 11
    Interest
    (1) Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. (2) However. such interest may also be taxed in the Contracting State in which it arises, and according to the law of that State: but where the beneficial owner of the interest is a resident of the other Contracting State the tax so charged shall not exceed 15 per cent of the gross amount of the interest. (3) Notwithstanding the provisions of paragraph (2) of this Article:
    (a) interest arising in a Contracting State shall be exempt from tax in that State if it is derived and beneficially owned by the Government of the other Contracting State or a local authority thereof or any agency of that Government or local authority;
    (b) interest arising in the United Kingdom which is derived and beneficially owned by the Central Bank of Turkey (Turkiye Cumhuriyeti Merkez Bankasi) shall be exempt from tax in the United Kingdom.
    (4) The term "interest" as used in this Article means income from government securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and debt-claims of every kind as well as all other income assimilated to income from money lent by the taxation law of the State in which the income arises. The term "interest" shall not include any item which is treated as a distribution under the provisions of Article 10 of this Agreement. (5) The provisions of paragraphs (1) and (2) of this Article shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or, in the case of a resident of Turkey, performs in the United Kingdom independent personal services from a fixed base situated in the United Kingdom, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14 of this Agreement, as the case may be, shall apply. (6) Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision. a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. (7) Where, by reason of a special relationship between the payer and the beneficial
    owner, or between both of them and some other person, the amount of the interest paid exceeds, for whatever reason, the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. (8) Any provision in the law of either Contracting State relating only to interest paid to a non-resident company shall not operate so as to require such interest paid to a company which is a resident of the other Contracting State to be treated as a distribution or dividend by the company paying such interest. The preceding sentence shall not apply to interest paid to a company which is a resident of one of the Contracting States in which more than 50 per cent of the voting power is controlled, directly or indirectly, by a person or persons who are residents of the other Contracting State. (9) The provisions of paragraph (8) of this Article shall not apply to interest paid by a company which is a resident of Turkey so long as the law of Turkey, in determining whether a payment of interest is to be treated as a distribution or dividend, does not discriminate against non-resident companies.
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    ARTICLE 12
    Royalties
    (1) Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. (2) However, such royalties may be taxed in the Contracting State in which they arise and according to the law of that State: but where the beneficial owner of the royalties is a resident of the other Contracting State the tax so charged shall not exceed 10 per cent of the gross amount of the royalties. (3) The term "royalties" as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, or the sale of any copyright of literary, artistic or scientific work, including cinematograph films and recordings for radio and television, or any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience, or for the use of, or the right to use, industrial, commercial or scientific equipment. (4) The provisions of paragraphs (1) and (2) of this Article shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise through a permanent establishment situated therein, or, in the case of a resident of Turkey, performs in the United Kingdom independent personal services from a fixed base situated in the United Kingdom, and the right or property in respect of which the royalties are paid is effectively
    connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14 of this Agreement, as the case may be, shall apply. (5) Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by that permanent establishment or fixed base, then such royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. (6) Where, by reason of a special relationship between the payer and the beneficial owner, or between both of them and some other person, the amount of the royalties paid exceeds, for whatever reason, the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case. the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.
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    ARTICLE 13
    Capital gains
    (1) Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 of this Agreement and situated in the other Contracting State may be taxed in that other State. (2) Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such a fixed base, may be taxed in that other State. (3) Gains derived by a resident of a Contracting State from the alienation of ships, aircraft and road vehicles operated in international traffic or movable property pertaining to the operation of such ships, aircraft and road vehicles shall be taxable only in that Contracting State. (4) Gains from the alienation of any property other than that referred to in paragraphs (1), (2) and (3) of this Article shall be taxable only in the Contracting State of which the alienator is a resident. However, such gains which arise in a Contracting State from the alienation of property within a period of one year from the date of its acquisition may be taxed in that State.
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    ARTICLE 14
    Independent personal services
    (1) Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State. However, such income may also be taxed in the other Contracting State if such services or activities are performed in that other State and if:
    (a) he has a fixed base regularly available to him in that other State for the purpose of performing those services or activities: or
    (b) he is present in that other State for the purpose of performing those services or activities for a period or periods amounting in the aggregate to 183 days or more in any continuous period of 12 months.
    In such circumstances only so much of the income as is attributable to that fixed base or is derived from the services or activities performed during his presence in that other State, as the case may be, may be taxed in that other State. (2) Income derived by an enterprise of a Contracting State in respect of professional services or other activities of a similar character shall be taxable only in that State. However, such income may also be taxed in the other Contracting State if such services or activities are performed in that other State and if:
    (a) the enterprise has a permanent establishment in that other State through which the services or activities are performed; or
    (b) the period or periods during which the services are performed exceed in the aggregate 183 days in any continuous period of 12 months.
    In such circumstances only so much of the income as is attributable to that permanent establishment or to the services or activities performed in that other State, as the case may be, may be taxed in that other State. In either case, the enterprise may elect to be taxed in that other State in respect of such income in accordance with the provisions of Article 7 of this Agreement as if the income were attributable to a permanent establishment of the enterprise situated in that other State. This election shall not affect the right of that other State to impose a withholding tax on such income. (3) The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants, and other activities requiring specific professional skill.
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    ARTICLE 15
    Dependent personal services
    (1) Subject to the provisions of Articles 16, 18, 19 and 21 of this Agreement, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. (2) Notwithstanding the provisions of paragraph (1) of this Article, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:
    (a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the fiscal year concerned; and
    (b) the remuneration is paid by, or on behalf of an employer who is not a resident of the other State; and
    (c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
    (3) Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised aboard a ship, aircraft or road vehicle operated in international traffic may be taxed in the Contracting State of which the person deriving the profits from the operation of the ship, aircraft or road vehicle is a resident.
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    ARTICLE 16
    Directors' fees
    Directors' fees and similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State.
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    ARTICLE 17
    Artistes and athletes
    (1) Notwithstanding the provisions of Articles 14 and 15 of this Agreement, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as an athlete, from his personal
    activities as such exercised in the other Contracting State, may be taxed in that other State. (2) Where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15 of this Agreement, be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised. (3) Notwithstanding the provisions of paragraphs (1) and (2) of this Article, income derived from activities as defined in paragraph (1) performed in a Contracting State by a resident of the other Contracting State shall be exempt from tax in the Contracting State in which those activities are exercised if the visit to that State is supported by public funds of the other Contracting State, including, in the case of Turkey, funds provided by public service associations or organisations.
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    ARTICLE 18
    Pensions
    (1) Subject to the provisions of paragraph (2) of Article 19 of this Agreement, pensions and other similar remuneration paid in consideration of past employment and any payments made under the social security scheme of either Contracting State, and annuities as defined in paragraph (2) of this Article, shall be taxable only in the State of which the recipient is a resident. (2) The term "annuity" means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money's worth.
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    ARTICLE 19
    Government service
    (1)
    (a) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
    (b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:
    (i) is a national of that State; or
    (ii) did not become a resident of that State solely for the purpose of rendering the services.
    (2)
    (a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
    (b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.
    (3) The provisions of Articles 15, 16 and 18 of this Agreement shall apply to remuneration and pensions in respect of services rendered in connection with any trade or business carried on by a Contracting State or a political subdivision or a local authority thereof.
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    ARTICLE 20
    Students, apprentices and trainees
    A student, business apprentice or trainee who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training shall be exempt from tax in that State on:
    (i) all remittances made from abroad for the purpose of his maintenance, education or training:
    (ii) all scholarships, grants, allowances and awards from governmental, charitable, scientific, literary or educational organisations for the purposes of his maintenance, education or training. Back to contents
    ARTICLE 21
    Teachers
    (1) An individual who visits one of the Contracting States for a period not exceeding two years for the purpose of teaching or engaging in research at a university, college, school or other recognised educational institution in that Contracting State, and who immediately before that visit was a resident of the other Contracting State, shall be exempted from tax by the first-mentioned Contracting State on any remuneration for such teaching or research for a period not exceeding two years from the date he first visits that State for such purpose, provided that such remuneration arises from sources outside the
    first-mentioned Contracting State. (2) This Article shall only apply to income from research if such research is undertaken by the individual in the public interest and not primarily for the benefit of some other private person or persons.
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    ARTICLE 22
    Other income
    Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Agreement, other than income paid out of trusts, shall be taxable only in that State. Back to contents
    ARTICLE 23
    Elimination of double taxation
    (1) Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not affect the general principle hereof):
    (a) Turkish tax payable under the law of Turkey and in accordance with this Agreement, whether directly or by deduction, on profits, income or chargeable gains from sources within Turkey (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Turkish tax is computed.
    (b) In the case of a dividend paid by a company which is a resident of Turkey to a company which is resident in the United Kingdom and which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Turkish tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Turkish tax payable by the company in respect of the profits out of which such dividend is paid.
    (2) For the purposes of paragraph (1) of this Article, the term "Turkish tax payable" shall be deemed to include any amount which would have been payable as Turkish tax for any year but for an exemption from, or reduction of, tax granted for that year or any part thereof under any of the following provisions of Turkish law:
    (a) (i) Additional Articles 1 to 6 of Chapter VIII of the Income Tax Law (Law No. 193 of 31 December 1960, as amended);
    (ii) Paragraph 9 of Article 8 of Chapter I, Part II, of the Corporation Tax Act (Law No. 5422 of 3 June 1949, as amended);
    so far as they were in force on, and have not been modified since, the date of signature of this Agreement, or have been modified only in minor respects so as not to affect their general character; or
    (b) any other provision which may subsequently be made granting an exemption from, or reduction of, tax which is agreed by the competent authorities of the Contracting States to be of a substantially similar character, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its general character.
    Provided that relief from United Kingdom tax shall not be given by virtue of this paragraph in respect of income from any source if the income arises in a period starting more than ten years after the exemption from, or reduction of, Turkish tax was first granted in respect of that source. (3) Subject to the provisions of the law of Turkey regarding the allowance as a credit against Turkish tax of tax payable in a territory outside Turkey, United Kingdom tax payable under the law of the United Kingdom and in accordance with this Agreement in respect of income (including profits and chargeable gains) derived by a resident of Turkey from sources within the United Kingdom shall be allowed as a deduction from the Turkish tax on such income. Such deduction, however, shall not exceed the amount of Turkish tax, as computed before the deduction is made, attributable to such income. (4) For the purposes of paragraphs (1) and (3) of this Article, profits, income and capital gains derived by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Agreement shall be deemed to arise from sources in that other Contracting State.
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    ARTICLE 24
    Non-discrimination
    (1) National of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. (2) Subject to the provisions of paragraph (4) of Article 10 of this Agreement, the taxation on a permanent establishment which an enterprise of a Contracting State has in
    the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. (3) Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected. (4) Except where the provisions of Article 9, paragraph (7) of Article 11, or paragraph (6) of Article 12 of this Agreement apply, and subject to the provisions of paragraph (8) of Article 11 of this Agreement, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. (5) Nothing contained in this Article shall be construed as obliging either Contracting State to grant to individuals not resident in that State any of the personal allowances, reliefs and reductions for tax purposes on account of civil status or family responsibilities which it grants to its own residents.
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    ARTICLE 25
    Mutual agreement procedure
    (1) Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Agreement, he may, irrespective of the remedies provided by the domestic laws of those States, present his case to the competent authority of the Contracting State of which he is a resident. (2) The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with the Agreement. (3) The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. (4) The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs.
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    ARTICLE 26
    Exchange of information
    (1) The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered by the Agreement insofar as the taxation thereunder is not contrary to the Agreement. Any information received by a Contracting State shall be treated as secret and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation toe the taxes covered by the Agreement. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. (2) In no case shall the provisions of paragraph (1) of this Article be construed so as to impose on a Contracting State the obligation:
    (a) to carry out administrative measures at variance with the law and the administrative practice of that or of the other Contracting State;
    (b) to supply information which is not obtainable under the law or in the normal course of the administration of that or of the other Contracting State;
    (c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public). Back to contents
    ARTICLE 27
    Diplomatic agents and consular officers
    (1) Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic or permanent missions or consular posts under the general rules of international law or under the provisions of special agreements. (2) Notwithstanding the provisions of paragraph (1) of Article 4 of this Agreement, all individual who is a member of the diplomatic or permanent mission or consular post of a Contracting State or any third State which is situated in the other Contracting State and who is subject to tax in that other State only if he derives income from sources therein, shall not be deemed to be a resident of that other State.
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    ARTICLE 28
    Entry into force
    Each of the Contracting States shall notify to the other the completion of the procedures required by its law for the bringing into force of this Agreement. The Agreement shall enter into force on the date of the later of these notifications and shall thereupon have effect:
    (a) in Turkey, in respect of income tax and corporation tax, for any fiscal year beginning on or after 1 January in the calendar year next following that in which the later of these notifications is given; and
    (b) in the United Kingdom:
    (i) in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6 April in the calendar year next following that in which the later of these notifications is given;
    (ii) in respect of corporation tax, for any financial year beginning on or after 1 April in the calendar year next following that in which the later of these notifications is given. Back to contents
    ARTICLE 29
    Termination
    This Agreement shall remain in force until terminated by one of the Contracting States. Either Contracting State may terminate the Agreement by giving notice of termination, through the diplomatic channel, at least six months before the end of any calendar year beginning after the expiration of five years from the date of entry into force of the Agreement. In such event, the Agreement shall cease to have effect:
    (a) in Turkey, in respect of income tax and corporation tax, for any fiscal year beginning on or after 1 January in the calendar year next following that in which the notice is given; and
    (b) in the United Kingdom:
    (i) in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6 April in the calendar year next following that in which the notice is given;
    (ii) in respect of corporation tax, for any financial year beginning on or after 1 April in the calendar year next following that in which the notice is given.
    In witness whereof the undersigned, duly authorised thereto, have signed this Agreement. Done in duplicate at London this 19th day of February 1986, in the English and Turkish languages, both texts being equally authoritative.
    For the United Kingdom For the Republic of Turkey:
    of Great Britain and
    Northern Ireland: Young R. Gumrukcuoglu
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