TAX NEWS NO: 2012/1

May 10, 2012


The Switzerland-Turkey Income Tax Treaty  Has Entered Into Force

The Switzerland-Turkey income tax treaty signed June 18, 2010, has entered into force February 8 and shall apply from January 1, 2013.


Under the treaty, dividends are taxable at a maximum rate of 5 percent if the beneficial owner is a company that directly holds at least 20 percent of the capital of the payer company. A 15 percent rate applies in other cases. Interest paid on a loan granted by an institution responsible for export promotion may be taxed at a maximum of 5 percent. In other cases, including when interest is derived by a bank, interest is taxable at a maximum rate of 10 percent. Royalties may be taxed at a maximum rate of 10 percent.


Turkey generally uses the credit method for the elimination of double taxation, and Switzerland uses a modification of the credit and exemption methods.


If you would like to review the tax treaty, you can click here (in Turkish, English and French).


Yours sincerely,

Deloitte Turkey



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