Turkey

Income tax exemption for benefits provided to employees of tech startups through share-based incentive plans:

The concerning Law number 7524 was published in the official gazette on 2 August 2024. To support employee retention and growth in tech startups, benefits provided to their employees through share-based incentive plans will be exempt from income tax, up to the annual gross salary of each employee.

If the shares acquired under such incentive plans are disposed of before a holding period of 12 years, the exemption is subject to recapture (with interest but without penalties) from the employer at different rates (100%, 75%, or 25%) depending on the duration of the holding period.

Withholding tax rates on dividends increased:

Dividends paid to a resident or non-resident individual, or a non-resident company are subject to withholding tax further to Article 94 of Income Tax Law and Article 15 and Article 30 of Corporate Income tax Law. The Presidential Decision no.9286 published in the Official Gazette on 22 December 2024 increases the concerned withholding tax rate to 15% from 10%.

Income tax exemption on 50% of the dividends received by individuals from non-resident companies:

The concerning Law number 7491, published in the Official Gazette on 28 December 2023, brought income tax exemption on 50% of the dividends received by individuals from non-resident companies. The only requirements to benefit from the 50% exemption are:

• a minimum holding of 50% in the share capital of the foreign company, and
• dividends must be remitted to Turkey by the date the individual income tax is due.