Global REIT Survey 2011 - EPRA

Global REIT Survey 2011REPORTINGTurkey (REIC)establishment in Turkey is to be declared after the application of cost adjustment(adjustment of the original cost with Whole Sale Price Index (WPI)except for the month the shares are disposed if the total increase in WPIis more than 10%), within 15 days following the sale of shares, through aspecial corporate tax return and be taxed at standard corporation tax rate.Additionally dividend withholding tax will be applied on the net gains. But,since most of the Double Tax Treaties prohibits Turkey’s taxation right onthese capital gains depending on the holding period (one year in most cases)of the Turkish company shares we strongly suggest to examine double taxtreaties before these transactions.Dividends received by non-resident corporationsDividends that are distributed by REIC will be subject to a 0% dividend withholdingtax in Turkey. On the other hand, taxation of dividends in the handsof non-resident corporations depends on the tax treatment of the country ofresidence.Capital gains received by non-resident individualsSince REICs are public companies capital gains derived from the sale ofshares in the Istanbul Stock Exchange by non-resident individuals, will besubject to taxation via withholding tax. The current rate of 0% withholdingtax is applicable for the capital gains received by non-resident individualsand that tax will be the final tax for those individuals.Dividends received by non-resident individualsDividends that are distributed by REIC will be subject to a 0% dividend withholdingtax in Turkey. On the other hand, taxation of dividends in the handsof non-resident individuals depends on the tax treatment of the country ofresidence. nAUTHORS CONTACTTurkeyErsun BayraktarogluTel. +90 212 326 6474ersun.bayraktaroglu@tr.pwc.com« back to content page10