In Brief
The withholding tax rate applicable on dividend payments has been increased to 15% effective from 22 December 2024. Previously, the tax rate was 10%.
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.9286 published in the Official Gazette on 22 December 2024 increases the concerned withholding tax rate to 15% from 10%.
In Türkiye, 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 increasing the withholding tax rate to 15% applies to the repatriation of such branch profits as well.
The decision entered into force on the date of its publication (22 December 2024). Accordingly, any dividends paid to a resident or non-resident individual, or a non-resident company on or after 22 December 2024 will be subject to 15% withholding tax, unless the rate is reduced under a tax treaty.
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.
