Turkey has introduced a discount on withholding tax for certain
employees working at entities which provide services outside
Turkey. From 1 January 2017, qualifying entities will be able to
offset the discounted tax rate against income taxes for employees
who are exclusively employed in the foreign services and who
actually provide the services outside Turkey.
The General Communiqué on the General Income Tax was
published in Official Gazette number 29458 on 27 August 2015
provisions for the entities providing legal services to abroad,
enabling them to benefit from a withholding tax reduction for
certain employees. The Communiqué was adopted within the
scope of amendments to the Income Tax Law amended by Law numbered
6728 on the Amendments on the Sveral Laws With the Airm of
Improving the Investment Environment.
To qualify for the reduced tax rate, entities must be engaged in
one of the following activities:
Architecture, engineering, design,
software, medical reporting, keeping accounting records, call
center, product testing, certification, data storage, data
processing, or data analysis services which are being used
exclusively outside Turkey.
Services being provided on the
occupational training areas determined by the Ministry of
Education and health services
provided under the permission and the supervision of related
To qualify for the discounted withholding tax rate, the services
must also meet all of the following criteria:
Be provided outside Turkey
Be provided to the real persons
residing outside of Turkey or to the enterprises having their
registered offices outside Turkey.
Have 85% of the revenue earned from
such services must come from outside Turkey.
Have invoices or other relevant
documents issued on behalf of real persons or legal entities
residing outside Turkey.
Employees who do not actually work in the activities listed
above cannot qualify for the tax reduction, nor can support
Please see this link for the full text of the
Communiqué (only available in Turkish).
Information first published in the
MA | Gazette, a fortnightly legal update newsletter produced by
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