Reduction On The Dividend Withholding Rate

Presidential Decree No. 4936 (“Decree“), published in the Official Gazette dated 22 December 2021, decreased the withholding tax rate applied, under Income Tax Law No. 193 and Corporate Income Tax Law No. 5520, to dividend distributions from 15% to 10%.

What does the Decree mean?

According to the Decree, withholding tax at the rate of 10% applies on the following:

• Dividends distributed by the full taxpayers to the nonresident real persons, nonresident taxpayers who are exempt from income or corporate tax, nonresident entities except those receiving dividends through a permanent establishment or a permanent representative in Turkey
• Dividends distributed by the full taxpayers to full taxpayer real persons, to those who are not an income or corporate taxpayer, or who are exempt from the income tax