General Issues Relating To Taxation of Expatriates The taxation of personal income in Turkey is related to what is known as a 'full tax liability' versus 'limited tax liability'. Full taxpayers are residents of Turkey who need to meet any one of the following conditions;
The full taxpayers are legally required to report all their income from whatever sources anywhere in the world and liable for taxation on that basis. Limited taxpayers on the other hand are generally non-residents who do not meet the above conditions and are liable for taxes only on the income they may have secured in Turkey. Please find below taxation of the income derived from marketable securities for residents and non resident persons in 2007. Please note that, a non resident person has to take the tax identification number for all types of transactions made in the banking system. In order to receive a tax identification number, non-resident taxable real persons are obliged to present a notarized copy of their passports of origin and copy of them upon being approved by the competent persons of the tax office, to the related tax office. Taxation for Non-Residents
Type of Income
Taxation
Repo and deposit interest incomes (YTL and Foreign Currency Deposit Accounts)
Subject to 15% withholding tax .(1)
Capital gains obtained from portfolio management of type (A) investment funds and securities investment partnerships, earnings of risk capital investment funds and partnerships, earnings of real estate investment funds or partnerships.
Subject to 1) 0 % witholding tax if held up to 1 year (up to 360 days for financial institutions) (2)2) 0% withholding tax if held 1 year and over (360 days for financial institutions)
Capital gains from portfolio management of type (B) investment funds and securities investment partnerships.
Subject to 0% withholding tax .(2)
Capital Gains Derived From The Eurobonds Issued by The Undersecretariat of Treasury
Not subject to withholding
Interest Income Derived Both From T-bills and Government Bonds and From Private Sector Bonds (Those issued AFTER 01.01.2006)
Subject to 0% withholding tax. (2)
Capital Gains Derived Both From T-bills and Government Bonds and From Private Sector Bonds (Those issued AFTER 01.01.2006)
Gains Derived From Futures and Options Transactions (Those gains derived from the transactions performed AFTER 01.01.2006)
Those obtained from the transactions performed in futures and options exchanges are subject to 0% withholding tax in 2006.
(1) The withholding tax rates vary upon the Double Tax Treaty concluded between Turkey.To benefit from Double Tax Treaty, the certificate of residence is required for non- resident persons.
(2) With the Law numbered 5527, the withholding rate has been reduced to zero to be effective as from 07.07.2006. The withholding tax rate applied over the income obtained before this date is 15%. To benefit from 0% of the withholding tax, the original copy of the certificate of residence drawn up and signed by the competent authority of the related country and the copy of it translated by the translation offices is required to be presented to the related tax office directly or through the banks and intermediary institutions by non -resident persons. Certificate of Residence regarding to the one year calendar is valid till the 4. month of the following year, the stated certificate is required to be renewed every year.Taxation for Residents
Subject to 1) 10 % witholding tax if held up to 1 year (up to 360 days for financial institutions) 2) 0% withholding tax if held 1 year and over (360 days for financial institutions)
Subject to 10% withholding tax .
Subject to 10% withholding tax.