Withholding Tax in Turkey: A 2026 Guide for Foreign Companies
Withholding tax (stopaj) in Turkey is a tax deducted at source on certain payments — such as dividends, professional service fees, rent, and royalties — before the payment reaches the recipient. The payer is responsible for withholding the tax and remitting it to the tax office. For foreign companies operating in Turkey, understanding withholding tax is essential for compliant cross-border payments.
What is withholding tax in Turkey?
Withholding tax is an advance collection mechanism. Instead of the recipient declaring and paying the tax later, the company making the payment deducts the tax at the time of payment and declares it through a monthly withholding tax return (muhtasar beyanname). It applies to both resident and non-resident recipients, and the applicable rate depends on the type of payment and any relevant double taxation treaty.
Common withholding tax rates in Turkey
The table below shows commonly applied withholding tax rates. These rates may be reduced under Turkey’s double taxation agreements (DTAs) with other countries, so always confirm the current rate and treaty position with your accountant.
| Type of Payment | Typical Domestic Rate | Notes |
|---|---|---|
| Dividends paid to shareholders | 15% | May be reduced under a double taxation treaty |
| Professional / freelance service fees | 20% | For self-employed individuals |
| Rent paid for real property | 20% | On commercial rental payments |
| Royalties and license fees | 20% | Treaty rates often lower |
Rates change with annual legislation and vary by treaty. Confirm the exact rate that applies to your payment with your accountant before withholding.
Who must withhold and when is it declared?
Companies, certain self-employed persons, and other defined payers must withhold the tax. The withheld amounts are reported on a monthly or quarterly withholding tax return and paid to the tax office. Missing deadlines can result in penalties and interest, so accurate bookkeeping and timely filing are critical.
- Identify whether the payment type is subject to withholding.
- Determine the correct rate, applying any treaty reduction if available.
- Deduct the tax at the time of payment.
- Declare and remit the tax via the withholding tax return.
Double taxation treaties and reduced rates
Turkey has signed double taxation agreements with many countries. These treaties often reduce withholding tax rates on dividends, interest, and royalties for residents of the treaty country. To benefit, the recipient usually needs to provide a certificate of tax residency. Our team can review the relevant treaty for your specific situation.
Frequently Asked Questions
What is the withholding tax rate on dividends in Turkey?
The standard domestic withholding tax rate on dividends distributed to shareholders is generally 15%, though this can be reduced under an applicable double taxation treaty.
Who is responsible for paying withholding tax?
The party making the payment (the payer) is responsible for withholding the tax at source and remitting it to the tax office through a withholding tax return.
Can withholding tax rates be reduced for foreign companies?
Yes. If a double taxation treaty exists between Turkey and the recipient’s country, reduced rates may apply, provided the required documentation (such as a tax residency certificate) is submitted.
Related Guides
Continue reading our tax guides for foreign companies: Corporate Tax in Turkey, VAT Registration in Turkey and Dividend Distribution and Taxation in Turkey.
Need help managing withholding tax and cross-border payments in Turkey? Our tax compliance services cover withholding tax returns and all related filings. Contact our team for a tailored review.