The Türkiye and South Korea tax treaty: what leaving profit costs
A Korean parent pays 15% on dividends from a Turkish subsidiary where it holds at least a quarter, and 20% below that. The qualifying rate matches Türkiye's own domestic 15%, which means the treaty does nothing for dividends unless the holding falls short.
Türkiye refunds half of what a software company or game studio spends on advertising, app store commissions and hosting when it sells to customers abroad, and up to 70% when those customers are in one of twenty target markets. It is paid in cash, against invoices you have already settled. Try it with your own numbers.
01Where does the South Korea treaty actually save money?
Türkiye withholds 20% on a royalty with no treaty in place and 10% under this one, so on $500,000 of licence fees paid to a parent in South Korea, $50,000 a year stays with the group instead of going to the tax office.
- Licence fee leaving Türkiye$500,000
- Withheld without a treaty, at 20%$100,000
- Withheld under this treaty, at 10%$50,000
- What the treaty saves on this payment$50,000
02What does it cost to pay a dividend to South Korea?
This treaty caps Türkiye at 15% to 20% and Türkiye already charges 15% at home, so paying a dividend to a parent in South Korea costs 15% either way.
- What Türkiye charges with no treaty15%
- The ceiling this treaty sets15% to 20%
- What Türkiye actually deducts15%
03What does Türkiye withhold on payments to South Korea?
| Payment leaving Türkiye | What you actually pay | Türkiye's rate with no treaty | The ceiling this treaty sets | Conditions |
|---|---|---|---|---|
| Dividends | 15% | 15% | 15% to 20% | The treaty allows Türkiye up to 15% to 20% here, which is above the 15% it charges anyway, so this line is unchanged by the treaty.15% where the parent holds at least 25%, otherwise 20%source |
| Interest | 10% | 10% | 10% to 15% | The treaty allows Türkiye up to 10% to 15% here, which is above the 10% it charges anyway, so this line is unchanged by the treaty.source |
| Royalties | treaty helps10% | 20% | 10% | Türkiye's domestic royalty rate is 20%source |
04How does the South Korea treaty compare with Türkiye's others?
South Korea shares its 15% dividend rate with Belgium, Canada, France, India and 5 others. 10 of the treaties here go lower, down to 5% for Austria.
- 5%6
- 10%4
- 15%10
Korea sits at the weaker end of Türkiye's network alongside the United Kingdom and Sweden. The qualifying 15% matches the domestic rate rather than improving on it, which is unusual: most treaties in this set buy something.
05What happens to the money once it lands in South Korea?
| In South Korea | Rate |
|---|---|
| Corporate tax on ordinary profit | 25%source |
| Withholding tax on dividends to a foreign parent | 20%source |
Türkiye against South Korea, measure by measure.
06What catches out groups based in South Korea?
- At 15% the treaty rate equals the domestic rate, so on a qualifying holding the treaty adds nothing on dividends.
- Below the threshold the rate rises to 20%, which is above the domestic 15%, a quirk worth checking against the specific facts.
- Interest ranges from 10% to 15%, so loan terms matter more than they do on the dividend side.
07How does this sit alongside what Türkiye pays South Korea groups back?
Korean publishers spending heavily on user acquisition see the incentive long before they see a dividend. It pays against invoices within six months of payment, and the treaty rate only comes up when profit is moved up to the parent.
| What you spend it on | Programme item | Paid back | Annual cap |
|---|---|---|---|
| Ads and player acquisition | Digital product promotion: ads & marketing (up to 10 products/yr) | 50% to 70% | 50 000 000 ₺ ≈ $1,043,841 |
| App store and platform commissions | App store & platform commissions (up to 10 products/yr) | 50% | 20 000 000 ₺ ≈ $417,537 |
| Hosting and servers | Hosting costs | 50% | 5 000 000 ₺ ≈ $104,384 |
What Türkiye would pay back on your spending
Türkiye runs a government programme that refunds part of what a software company or game studio spends on reaching customers abroad. It covers advertising, app store and platform commissions, and hosting. The refund is paid in cash against invoices the company has already settled, so it does not depend on the company making a profit. The standard rate is 50%, and it rises to 70% when the customers being targeted are in one of the twenty countries on the Turkish Ministry of Trade's target list.
Put your own yearly figures in below. The rates and the annual caps come from the same file as our full calculator, and the total updates as you type.
08Questions we get asked
Why would we use the treaty at all then?
For interest and royalties, where it does reduce the domestic rates of 10% and 20% respectively. On dividends at a qualifying holding it is neutral.
Is a Korean parent a poor structure for Türkiye?
On dividend rate alone it is unremarkable. The decision usually turns on where the group already operates rather than on this row.
Who is telling you this
CyberScope Solutions is an Istanbul consultancy that manages Türkiye's IT export incentive claims for software companies and game studios. Treaty rates decide what a group pays to move profit, and they come up in almost every first conversation, so we keep them written down rather than looked up each time.
- Every figure is sourced. Each number links to the page it came from and carries the date we last checked it.
- You find out early if it is not for you. The first call is thirty minutes and we will say plainly if your spend pattern does not suit the programme.
- These pages get rebuilt, not left. Rates and caps come from the same file as our calculator, so when one changes the page changes with it.
Turn that number into money
Send us the rough shape of your spend. You get back what it is worth, what setting it up involves, and how fast the first claim can go in. Companies already operating here treat this as routine, and the six month window means the clock is running on invoices you have already paid.
- A reply from a person within one working day
- No mailing list, no drip sequence
- Thirty minutes, and you keep the numbers either way
Got it.
We will read it properly and reply within a working day. If you would rather get it over with now, pick a time that suits you.
Book a 30 minute call09Where these numbers come from
- https://taxsummaries.pwc.com/turkey/corporate/withholding-taxes checked 2026-08-21
- https://taxsummaries.pwc.com/quick-charts/corporate-income-tax-cit-rates checked 2026-08-21
- https://taxsummaries.pwc.com/quick-charts/withholding-tax-wht-rates checked 2026-08-21