The Council of Ministers has approved an agreement between the
Republic of Turkey and Republic of Kosovo ("State" or
collectively "States") to prevent tax evasion and double
income taxation for residents of the two countries
On 19 August 2015, the Council of Ministers approved the
Agreement and its annexed Protocol, which were originally signed on
10 September 2012 in Pristina, Kosovo. The Agreement and Protocol
were approved in Turkey by Law number 6606 on 10 February 2015. The
Council of Ministers' approval decision was published in the
Official Gazette on 28 August 2015.
Each State must notify to the other when local legal procedures
are completed to bring the Agreement into force. The Agreement will
enter into force completely on the later of these notification
dates (Article 27 of the Agreement).
The Agreement applies to (Article 27 of the Agreement):
Taxes withheld at source for amounts
paid or credited on or after the first of January in the calendar
year after the Agreement enters into force.
Other taxes for taxable years which
begin on or after the first of January in the calendar year after
the Agreement enters into force.
Avoidance of Double Taxation
If a resident of one State receives income which can be taxed in
the other State (under the Agreement), the first State must allow a
deduction from the resident's income tax which is equal to the
income tax which was paid to the other State (Article 22 of the
Such deduction must not exceed the income tax calculated before
the deduction was given, which is attributable to the taxable
income in the other State.
Where income received by a resident of one State is exempt from
tax in that State, the State may nevertheless take into account the
exempted income when calculating the tax payable on the
resident's remaining income.
Nationals of one State must not be subject to any taxation or
any related requirement in the other State, which is different or
more burdensome than the requirements applicable to local nationals
or residents of that other State in the same circumstances (Article
23 of the Agreement).
Privilege For Taxation of Dividends for Turkish Residents
Dividends paid by a company which is resident of Kosovo to a
resident of Turkey will be subject to zero percent taxation at
source (Article 3 of the annexed Protocol).
Please see this link for full text of the Agreement.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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