1- Which incomes are regarded as dividends?
The incomes regarded as dividends according to Income Tax Law and acquired from all taxpayers (such as, Co. Ltd. or Inc.) by real persons have been indicated below:
1.1-All profit shares acquired by means of all kind of shares (certificates of stock)
1.2-Incomes acquired by participation stocks
1.3-Profit shares given to administrators and chairman/chairwoman of the institutions
2-Is it necessary to declare the whole dividend?
No. The half of the dividend should be declared. The other half is exemption.
The half of the dividend (that are acquired from fully responsible and mentioned above) is exempted from income tax.
The other half of the dividend which is not regarded as an exemption should be taken into consideration while calculating the tax.
To the extent that there is no other income being subject to declaration, if the dividends that are subject to tax in 2016 overstep the limits of 30.000 TL, it should be declared with income tax return.
3-Can I deduct stoppage paid on behalf of me during profit distribution from the tax?
Yes.
You may deduct dividend withholding in the ratio of 15 % (that amount is paid to the taxpayer’s own tax office)from the tax amount which is calculated through the income tax return by issuing on behalf of each shareholder for profit distribution.
4-Should I deduct the half of fifteen per cent of stoppage?
You may deduct all.
You will deduct the half of resulting profit; however, you will deduct the whole stoppage.
5-Can you explain profit distribution with an example?
The table with reference to profit distribution is specified below:
The explanations about the sample table:
- 1 million TL which will be distributed is the balance after the deduction of legal requirements.
- The shareholder who declares his/her profit hasn’t got any other income being subject to declaration.
- The dividend was paid to the shareholders in 2016.
6-If prior year profit is distributed, is it compulsory to file income tax return?
In case of distribution of prior year profits (31 December 1998 and previous years), shareholders/partners will not submit a declaration whatever the amount is.
İn case of the distribution of the incomes, which are exempted from Corporation tax and related to the accounting period ending between the dates of 01.01.1999 – 31.12.2002, as well as incomes that benefit from investment allowance exemption being subject to tax cut within the scope of provisional article 61 of Income Tax Law;
After 1/9 of the realized profit will be added to the dividend made by real persons, the half of the remaining amount will be regarded as taxable income. 1/5 of the declared amount will be set off from the estimated income tax.
7-Should the Turkish citizens living abroad declare their profit share that they gain in Turkey?
Turkish citizens who live abroad more than 6 months by getting residence/work permit will be taxed as a limited taxpayer in respect to the incomes and revenues that they gain in Turkey.
The citizens who are taxed as a taxpayer will not submit a declaration if their incomes are made up of income from moveable capitals that are taxed by means of detention.
In brief, 15 % stoppage of profit shares of Turkish citizens living abroad is the final taxation; additionally, they will not file income tax return for their dividends.
Dividend: income, profit share, acquisition, earnings
Source: sanayi.gov.tr
Date: 20 January 2017
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