Treaty detail
United States - Turkey tax treaty
A practical treaty page built around the official treaty text, key withholding categories, permanent-establishment rules, and article-level summaries.
Signed
1996-03-28
Effective
1998-01-01
Articles seeded
6
Withholding snapshot
Dividends
Individual rate: 20% · Corporate rate: 15%
The 15 percent corporate rate generally depends on direct ownership of at least 10 percent of the voting stock of the dividend payer. Higher domestic-law rates may apply outside qualifying cases, and article-level review is required.
Interest
Rate: 15%
IRS Treaty Table 1 reflects a general 15 percent rate, with a 10 percent rate available in certain cases for interest paid on loans with maturities over two years. Government-source and other carve-outs may also apply subject to article-level review.
Royalties
Rate: 10%
The treaty applies a general 10 percent rate to most royalty categories, with a reduced 5 percent rate for certain copyright royalties in qualifying cases. Article text and protocol updates still control.
Permanent establishment
Construction threshold: more than 6 months
Dependent-agent analysis remains important where a person habitually exercises authority to conclude contracts on behalf of the enterprise under the treaty wording.
Other treaty flags
Pension treatment is article-specific and split between residence and source taxation depending on the type of pension. Government-service pensions follow distinct rules.
Seeded article summaries
Article 4
Residence
Defines treaty residence and is the starting point for any claim to reduced withholding or treaty protection.
The residence article matters particularly for dual-resident fact patterns where both U.S. and Turkish domestic rules attempt to claim the same taxpayer. Tie-breaker analysis under this article frequently controls the outcome.
Article 5
Permanent Establishment
Sets the business-presence threshold that permits source-country taxation of business profits.
The Turkey treaty generally includes a six-month threshold for construction and installation projects, which is shorter than many OECD-style treaties. Service-PE and dependent-agent analysis remain article-driven and fact-specific.
Article 7
Business Profits
Generally reserves business profits to the residence state unless a permanent establishment exists in the other state.
This is the operating rule for cross-border consultants and operating companies once the PE analysis is complete. It generally prevents source-country tax on ordinary business profits when the PE threshold has not been crossed.
Article 10
Dividends
Provides treaty limits on source-country dividend withholding in qualifying cases.
The treaty table's 15 percent and 20 percent rates are the quick snapshot, but the article wording controls. Founders, holding companies, and U.S.-Turkish joint ventures should not rely solely on the table without protocol and article review.
Article 11
Interest
Provides limited reduction of source-country withholding on qualifying interest.
Unlike many U.S. treaties, the Turkey treaty does not eliminate interest withholding outright and instead applies a 10-15 percent rate range depending on the loan profile. Beneficial ownership and documentation drive the practical analysis.
Article 12
Royalties
Limits source-country withholding on qualifying royalties.
The royalty article applies a general 10 percent ceiling, with a reduced 5 percent rate available for certain copyright royalties. Software, patent, and know-how categorization can materially affect the outcome.
Official text
Other treaties involving these jurisdictions
Computed from the cross-reference graph. Links open the related entity on this site.
This entry cites
- TreatyUS–GB treaty
- TreatyUS–CA treaty
- TreatyUS–DE treaty
- TreatyUS–FR treaty
- TreatyUS–JP treaty
- TreatyUS–NL treaty
- TreatyUS–AU treaty
- TreatyUS–KR treaty
Primary sources
- Turkey treaty documents pageVerified 2026-05-20
- Official U.S.-Turkey treaty PDFVerified 2026-05-20
- IRS Tax Treaty Table 1Verified 2026-05-20
- Turkey technical explanationVerified 2026-05-20
Important disclaimer
This library is for general tax education only. Always verify filing obligations, due dates, and tax consequences against the cited primary source or with a qualified tax professional.