How will the payments made to the taxpayers due to oil exploration activities be taxed, in Turkey?
The services to be provided by the foreign taxpayer institution regarding oil exploration activities are within the scope of self-employment activity and the payments made in return for the expenses shall be accepted as self-employment payment to the limited taxpayer. Within this framework, followings are realized;
– If the activities are carrying out within the scope of commercial activities by having a permanent workplace or permanent representative in Turkey, corporation tax will not be deducted from payments and the income will be taxed under the commercial income provisions according to our internal legislation.
– 5% corporate tax must be deducted from all payments made if the activities are carried out without having a workplace or permanent representative in Turkey or without the connection with commercial activity carried out in those workplaces even if they have a workplace or permanent representative in Turkey, pursuant to Article 30/1-b of the Corporate Tax Law and in accordance with the Decisions of the Council of Ministers numbered 2009/14593.
On the other hand, if there is an agreement on the prevention of double taxation between the country where the limited taxpayer served as self-employed is located and Turkey, the provisions of this agreement will be considered for the tax deduction.
Source: GİB
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