Many individuals and businesses may wonder if there is a double taxation agreement between the United Kingdom and Turkey. The answer is yes, there is a Double Taxation Agreement (DTA) in place between the two countries.
A DTA is an agreement between two countries that aims to avoid the double taxation of income earned in both countries. Double taxation occurs when an individual or company is taxed by both countries on the same income. This often leads to financial losses and can discourage cross-border investment and trade. DTAs provide relief in such scenarios by setting out rules for the taxation of income and capital gains in both countries.
The DTA between the UK and Turkey was signed on 7 July 1987, and came into force on 11 February 1989. It was amended by a Protocol signed on 24 January 2011. The primary objective of this agreement is to eliminate double taxation on income and gains that arise in Turkey and the UK.
Under the DTA, residents of one country are entitled to relief from double taxation on income, profits, and gains arising in the other country. The agreement applies to taxes on income, capital gains, and, in the case of the UK, corporation tax. The main provisions of the agreement include measures to avoid double taxation on dividends, interest, royalties, and certain other types of income.
In addition, the DTA outlines the procedures for settling disputes between tax authorities in both countries. If there is a disagreement on how the agreement should be interpreted, a mutual agreement procedure can be invoked to resolve the issue. This can be helpful for taxpayers who might have difficulty resolving disputes themselves.
In conclusion, the DTA between the UK and Turkey provides relief to individuals and businesses from double taxation on income, profits, and gains arising in both countries. This agreement ensures that taxpayers are not taxed twice on the same income, which can help to encourage cross-border investment and trade. If you are a resident of either country and earn income or capital gains in the other, it is recommended that you consult a tax specialist to ensure that you are taking full advantage of the provisions of the DTA.