The tax on the income of fully liable taxpayer is calculated by applying the progressive tax rates disclosed in (6.4). If , after the deductions and exemptions allowed by law a capital gain remains to be declared, this is declared in 25th of March of the following year through an annual income tax return.
Tax paid through withholding each type of income is deducted from the income tax calculated on the tax return. If there is no income which must be declared via a tax return, the tax paid through withholding is considered as final tax.
This is subject to dividend withholding tax. Under the corporate tax legislation, companies must pay 15 % withholding tax on the dividends that they distribute to fully liable taxpayer. There is an exclusion mechanism for half part of dividend income and the other half is declared if the total gain exceeds approximately TL 30.000.- together with interest income.
The interest income from government bonds and treasury bills is subject to withholding tax. The rate of withholding applicable on the interest gains derived from government bonds and treasury bills issued after October 1, 1998 is zero percent. Such income is declared if it exceeds TL 34.000.-.
For securities that are denominated and indexed in foreign currency, foreign Exchange
differences and index differences are not subject to tax. Trading income from government bonds and treasury bills is declared if the amount exceeds TL 30.000.- together with other security trading gains. Acquisition value may be at CPI rate, except for the month in which it is sold.
Non-resident individuals are not obliged to submit tax returns for their share certificate dividend income, whatever the amount is. Such income is subject to dividend withholding. The dividend withholding rate is determined in the double tax treaty between Turkey and the country where the individual lives. If there is no double tax treaty between Turkey and that country, the tax to be paid is decided in line with Turkish tax laws. The withholding rate on dividends is 15% and it is the responsibility of the resident companies which distributed the dividends.