The pending income tax treaty between Somalia and Turkey was signed on 3 June 2016. The treaty is the first of its kind between the two countries, and the first ever for Somalia with any country.
Taxes Covered
The treaty covers the incomes tax and corporate taxes of both countries.
Withholding Tax Rates
- Dividends - 5% if the beneficial owner is company directly holding at least 10% of the paying company's capital; otherwise 15%
- 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; and
- 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 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
Entry into Force and Effect
The treaty will enter into force once the ratification instruments are exchanged and will apply from 1 January of the year following its entry into force.