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Withholding tax rate on dividends lowered

Tax bulletin - 2021/12

In brief

The withholding tax applicable on dividend payments has been reduced to 10% effective from 22 December 2021. Previously, the tax rate was 15%.


In detail

Dividends paid to a resident or non-resident individual, or a non-resident company are subject to withholding tax further to Article 94 of Income Tax law and Article 15 and Article 30 of Corporate Income Tax Law. The Presidential Decision No.4936 published in the Official Gazette on 22 December 2021 reduces the concerned withholding tax rate to 10% from 15%.

In Turkey, repatriation of after-tax profits of branches to the overseas headquarters is also subject to withholding tax (same as profit distribution by companies). The recent decision reducing the withholding tax rate to 10% applies to the repatriation of such branch profits as well.

The decision entered into force on the date of its publication (22 December 2021).

No withholding tax is imposed on dividends paid to a resident company and hence the recent decision does not have impact on profit distributions from a resident company to another resident company. 


Contact us

Ebru Türkçelik

Ebru Türkçelik

Tax Services, Director, PwC Turkey

Tel: +90 212 326 6454

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