Controlled Foreign Company Regime Provided that a corporation or a person, who is a fully liable taxpayer, has 50% of shares or vote/dividend rights of its company abroad, that entity is considered as foreign controlled company. The earnings of foreign controlled company whether or not it is distributed are subject to corporate income tax if the following conditions are met collectively; • If 25% or more of total gross profit of the foreign controlled entity consists of passive income such as interest, profit share, rent, license fee, securities sales revenue other than commercial, agricultural, or self-employed activity carried out by employment, capital, and organization, • If commercial profit of a foreign controlled company has less than %10 tax burden similar to corporate income tax in Turkey and • If total gross revenue of foreign controlled company exceeds 100,000 TRY. Double Taxation Relief under Corporate Income Tax Law Ordinary credit with overall limitation (including taxes paid by the CFC) is applicable under Article 33 of CITL. Residents may deduct from their income tax liability foreign taxes assessed on foreign income. However, the deductions may not exceed the amount of the tax assessed on such income in Turkey. Taxes not deducted wholly or partly in the fiscal year when the foreign income is transferred to the accounts of company in Turkey can be carried forward to the following 3 years. Double Taxation Relief under Tax Treaties Turkey has a broad tax treaty network, with most treaties following the OECD Model Tax Convention. Ordinary credit with overall limitation is applicable under most of the tax treaties of Turkey in force.
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Education Ramazan holds an Advanced