Rental income from immovable property is mentioned in Article 6, titled “Income from Immovable Property” and Article 12, titled “Royalties” of Double Taxation Agreements that Turkey concluded.
Article 6 of the Agreements mainly deals with income from leasing of immovable properties and related rights, and provides that the State where the immovable property is situated has the right of taxation. Accordingly, taxation of the rental income from the immovable property situated in Turkey of individuals resident in the other State will be in accordance with the procedure and principles of domestic legislation of Turkey and in these Double Taxation Agreements there is not any provision limiting the domestic legislation.
For example, Taxpayer (D) who is living in Germany will be taxed in accordance with the domestic legislation of Turkey in case he rents his property in Bodrum.
Turkey has a limited right of taxation from the rental income of nonresident taxpayers obtained by leasing royalties defined in Article 12 of Double Taxation Agreements.
Rate of withholding to be made on the mentioned income may vary from state to state in the Agreements. If the rate specified in Article 12 of the Agreement and the rate defined in our domestic legislation differs, the calculation should be made according to the lower rate.
For example, Taxpayer (E) who is a music producer and living in Netherlands had given the copyright of taken over the music album to a music production company in Turkey. The payments of copyright fees that would be done Taxpayer (E) by the music production company are subject to 10% withholding tax according to the Article 12 of Double Taxation Agreement between Turkey and Netherlands.
As the example above, the payments that would be bought from someone else by the comic paper to Taxpayer (F) who is a caricaturist and living in Netherlands, are subject to 10% withholding tax according to the Article 12 of Double Taxation Agreement between Turkey and Netherlands, in case he gives the usage right of the cartoons he bought to the comic paper in Turkey.
However, in order to be taxed in line with Article 12 of Double Taxation Agreement, residents (full taxpayers) of other country who derive income or profit from Turkey, should submit certificate of residence received from competent authorities of their own resident country along with the translated copy of it into Turkish language which will be approved by a notary public or Turkish Consulates in that country, to the related tax office or the tax withholders in case withholding tax is required. The tax withholders are required to keep the certificates of residence to submit to the competent authorities on demand. In case of failure of submitting the certificate of residence, domestic laws shall be applied instead of the Articles of the Agreement.
The taxes that would be paid by Turkish citizens, who are living in foreign countries related with the incomes they earned in Turkey, would be deducted or exempted at the countries they are living in accordance with the Double Taxation Agreement with that country.
Source: Revenue Administration – Guidebook on Rental Income for Non-Resident Taxpayers
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