What will be the taxation of payments made from Turkey to limited taxpayers due to oil exploration activities?

02.06.2021 

The services to be provided by the foreign limited taxpayer institution abroad in relation to oil exploration activities are within the scope of self-employment activities, and the payments made, including expenses, will be considered as self-employment payments made to the foreign limited taxpayer institution.

In this context, regarding the self-employment activity in question:

– In case it is carried out within the scope of commercial activity by having a workplace or permanent representative in Turkey, no corporate tax deduction will be made from the payments made, and the income will be taxed in accordance with our domestic legislation within the framework of the commercial income provisions.

– In case it is carried out without a workplace or permanent representative in Turkey, or even if there is a workplace or permanent representative in Turkey, not in connection with the commercial activities they carry out in these workplaces, a 5% corporate tax deduction is required on all payments made in accordance with the Council of Ministers Decisions numbered 2009/14593, pursuant to Article 30/1-b of the Corporate Tax Law.

On the other hand, if there is a double taxation avoidance agreement between Turkey and the country where the limited taxpayer institution performing the self-employment service is a resident, it is natural that the provisions of this agreement will also be taken into account.

Source: Revenue Administration of Republic of Turkey – Translated by Karen Audit – The rights of this translation belong to KarenAudit and unauthorized use is prohibited.
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