Türkiye limits 0% withholding tax rate on share-buy-back transactions for corporations with shares traded in Borsa Istan

• Presidential Decision No. 6791, published in the repeating Official Gazette dated 14 February 2023, eliminated the 15% withholding tax (WHT) on amounts considered to be dividends distributed as a result of share-buy-back transactions.
  
  
• On 7 July 2023, Presidential Decision No. 7343, limited the application of the 0% WHT to share-buy-back transactions of corporations whose shares are traded in Borsa Istanbul (Istanbul Stock Exchange).

Türkiye's Presidential Decision No. 6791 set a 0% withholding tax (WHT) on amounts regarded as dividends distributed as a result of share-buy-back transactions of Turkish full tax-liable corporations. (See EY Global Tax Alert, Türkiye reduces withholding tax to 0% on share-buy-back transactions, dated 15 February 2023.)

On 7 July 2023, Presidential Decision No. 7343 amended this rule, establishing that the 0% WHT will apply solely for amounts regarded as dividends distributed as a result of share buy-back transactions of full tax-liable corporations whose shares are traded on Borsa Istanbul.

This Decision entered into force on 7 July 2023 and applies to the shares acquired on and after 7 July 2023.

For additional information with respect to this Alert, please contact the following:

Kuzey Yeminli Mali Müsavirlik A.S., Istanbul

• Ates Konca, International Corporate Tax Advisory Leader

Ernst & Young LLP (United States), Turkish Tax Desk, New York

• Gamze Durgun

Published by NTD's Tax Technical Knowledge Services group; Carolyn Wright, legal editor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.