Are the interests paid to companies abroad and the amounts paid to the group company in return for loan guarantees subject to tax deduction?

02.06.2021 

Interest payments made to companies abroad and expenses such as commissions paid in return for guarantor service are considered as receivable interest within the framework of financing services, in accordance with the subparagraph (ç) of the first paragraph of Article 30 of the Corporate Tax Law No. 5520, a 10% tax deduction is made pursuant to the Council of Ministers Decision No. 2009/14593.

In addition, the financial services between group companies can be criticized in terms of hidden income or they can be the subject of concealed capital.

Pursuant to the Council of Ministers Decision No. 2009/14593, 0% tax is deducted from the interest paid in return for the loans used from foreign banks and financial institutions.

Source: Revenue Administration of Republic of Turkey – Translated by Karen Audit – The rights of this translation belong to KarenAudit and unauthorized use is prohibited.
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.