Turkey Increased Its Corporate Tax Rate
TURKEY INCREASED ITS CORPORATE TAX RATE from 25% to 30%.
It also eliminated withholding taxes on dividends in favor of a tax on the distributing corporation at the time it pays dividends. The rate for the distributions tax is expected to be 10%. A 10% corporate surtax will continue to apply.
Turkey may soon find itself in the same bind as India. India last year eliminated a requirement that Indian companies paying dividends to foreign shareholders must withhold income taxes on the shareholder. Instead, a tax is imposed on the distributing corporation directly. Some argue the move backfired because the typical power sales contract with a state electricity board allows a passthrough of taxes imposed on the project company. Thus, the government ends up bearing the new distributions tax.