Turkey has published Presidential Decision No. 4835 of 22 November 2021 in the Official Gazette, which includes that the income tax treaty with Venezuela entered into force on 14 October 2021. The treaty, signed 3 December 2018, is the first of its kind between the two countries.
Taxes Covered
The treaty covers Turkish income tax and corporate tax and covers Venezuelan taxes on income.
Withholding Tax Rates
- Dividends - 5% if the beneficial owner is a company directly holding at least 25% of the paying company's capital; otherwise, 10%
- Interest - 10%
- Royalties - 10%
Capital Gains
The following capital gains derived by a resident of one Contracting State may be taxed by the other State:
- Gains from the alienation of immovable property situated in the other State;
- Gains from the alienation of movable property forming part of the business property of a permanent establishment in the other State;
- Gains from the alienation of shares or comparable interests if, at any time during the 365 days preceding the alienation, the shares or comparable interests derived more than 50% of their value directly or indirectly from immovable property situated in the other State; and
- Gains from the alienation of shares that represent a participation of more than 50% of the stock of a company that is a resident of the other State.
Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.
Double Taxation Relief
Both countries apply the credit method for the elimination of double taxation.
Entitlement to Benefits
Article 28 (Entitlement to Benefits) provides that a benefit under the treaty shall not be granted in respect of an item of income if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of the treaty.
Effective Date
The treaty applies from 1 January 2022.