How To Avoid Double Taxation In Turkey: Leverage DTAAs & Foreign Tax Credits

I. Introduction

With the increasing integration of the global economy, the presence of Turkish businesses in international markets is steadily strengthening. While this situation creates significant opportunities through foreign trade, service provision, and investment activities, it also brings forth complex tax issues such as the inherent risk of double taxation in Turkey for international operations.

Income generated from activities in another country may typically be subject to taxation in the country where it was earned (the "source country"). Simultaneously, as a Turkish company, its global income is generally subject to corporate tax in Turkey (its "residence country"). This situation can lead to the same income being taxed twice, significantly impacting profitability and competitiveness.