What are the withholding tax rates in Turkey for dividends, royalties, and services?

Turkey's withholding tax system (Stopaj) applies to a wide range of payments and is one of the most important compliance areas for businesses making payments to individuals or non-residents.

Domestic withholding rates (2025)

Payments to Turkish individual (natural person) recipients: - Dividends (kar payı) from companies to individual shareholders: 15% - Professional fees (Serbest Meslek) to individual accountants, lawyers, doctors, engineers, consultants: 20% - Immovable property rent (Gayrimenkul kira) paid by companies to individual landlords: 20% - Agricultural product purchases from individual farmers: 2-4% (varies by product) - Gross wages to employees: progressive Gelir Vergisi rates via cumulative monthly withholding table

Withholding on corporate-to-corporate dividends Dividends paid by a Turkish company to another Turkish company: no withholding — the recipient company benefits from the 50% dividend exemption under Kurumlar Vergisi Kanunu.

Cross-border withholding (non-residents) Base statutory rates under Kurumlar Vergisi Kanunu Article 30: - Dividends to non-resident individuals and companies: 15% - Royalties (reklam, know-how, brand licences, patents): 20% - Technical service fees and management fees: 20% - Construction and repair services performed in Turkey: 3% - Interest on corporate bonds: 10% - Interest on bank deposits: 10-15% depending on deposit term - Non-resident film, television content licencing: 20%

Tax treaty reductions Turkey has bilateral tax treaties (Çifte Vergilendirmeyi Önleme Anlaşmaları) with approximately 90 countries. Treaties typically reduce withholding rates below the statutory levels. Key treaty rates with major trading partners (illustrative 2025 rates — always verify against the specific treaty text): - UK: dividends 15% (10% if 25%+ ownership), royalties 10% - Germany: dividends 15% (5% if 25%+ ownership), royalties 10% - Netherlands: dividends 15% (5% if 25%+ ownership), royalties 10% - UAE: dividends 5%, royalties 10% - USA: dividends 15% (5% if 10%+ ownership), royalties 5-10%

To apply treaty-reduced rates, the non-resident recipient must provide: 1. Certificate of Residence (Mukimlik Belgesi) issued by their home country tax authority, apostilled 2. A written declaration that they are the beneficial owner of the income Without these documents, the full statutory 20% or 15% rate applies.

Reporting and payment — Muhtasar Beyanname All domestic withholding must be reported on the monthly Muhtasar ve Prim Hizmet Beyannamesi. Non-resident withholding on one-off payments is reported on the same declaration in the month of payment. The withheld amount is remitted to the Revenue Administration by the 26th of the following month.

Dividend withholding mechanics When a Turkish company declares a dividend: 1. The General Kurulu (Shareholders' Meeting) approves profit distribution 2. The company calculates 15% Stopaj on the gross dividend amount for individual Turkish shareholders 3. The company pays the shareholder the net amount (gross dividend minus 15% Stopaj) 4. The 15% withheld is remitted to the Revenue Administration via the Muhtasar Beyanname

For small dividends, the 15% withholding is often the final tax — individual shareholders receiving dividends where their gross dividend income does not push them into a higher GV bracket than 15% need not include it in an annual declaration.

Thin capitalisation — withholding interaction If the Revenue Administration determines that an intercompany interest payment exceeded the arm's length thin-cap threshold and reclassifies the excess as a deemed dividend, the reclassified amount becomes subject to the 15% dividend Stopaj retroactively — creating a significant additional liability.