The Türkiye and the United Arab Emirates tax treaty: what leaving profit costs
An Emirati parent pays 10% on dividends from a Turkish subsidiary where it holds at least a quarter, and 12% below that. The 12% fallback is the lowest non-qualifying rate in this set, where most treaties fall back to 15% or 20%. Interest and royalties are both 10%.
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.
01How much is the shareholding threshold worth in the United Arab Emirates?
A parent in the United Arab Emirates that clears the shareholding test pays 10% on dividends leaving Türkiye, and one that misses it pays 12%. On $500,000 that is $10,000 decided by the share register. The 25% holding is settled when the Turkish company is formed.
- Dividend leaving Türkiye$500,000
- Withheld with the 25% holding, at 10%$50,000
- Withheld below it, at 12%$60,000
- What the holding is worth$10,000
02What does Türkiye withhold on payments to the United Arab Emirates?
| Payment leaving Türkiye | What you actually pay | Türkiye's rate with no treaty | The ceiling this treaty sets | Conditions |
|---|---|---|---|---|
| Dividends | treaty helps10% | 15% | 10% to 12% | 10% where the parent holds at least 25%, otherwise 12%source |
| Interest | 10% | 10% | 10% | The treaty allows Türkiye up to 10% 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 |
03How does the United Arab Emirates treaty compare with Türkiye's others?
the United Arab Emirates shares its 10% dividend rate with Japan, Poland and Singapore. 6 of the treaties here go lower, down to 5% for Austria.
- 5%6
- 10%4
- 15%10
The Emirati treaty is unusual at the bottom rather than the top. Its 10% qualifying rate is not the lowest in the network, but its 12% fallback is: every other treaty here charges 15% or 20% when the shareholding threshold is missed. For a parent unsure of holding 25%, that is the safest position available.
04What happens to the money once it lands in the United Arab Emirates?
| In the United Arab Emirates | Rate |
|---|---|
| Corporate tax on ordinary profit | 9% above AED 375,000, and 0% on qualifying free zone incomesource |
| VAT, standard rate | 5%source |
| Withholding tax on dividends to a foreign parent | 0%source |
Türkiye against the United Arab Emirates, measure by measure.
05What catches out groups based in the United Arab Emirates?
- The fallback rate of 12% is unusually kind. Most Türkiye treaties charge 15% or 20% when the shareholding threshold is not met.
- The Emirates withhold nothing on the way out, so the round trip is cheaper than with most European parents.
- Free zone status on the Emirati side has conditions of its own, and they are separate from anything in this treaty.
06How does this sit alongside what Türkiye pays the United Arab Emirates groups back?
The treaty covers distributions. The export incentive covers spending and pays cash, which is the half of the equation the Emirates offer nothing on.
| 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.
07Questions we get asked
Is the UAE the cheapest parent location?
On the round trip it is competitive: a 10% Turkish rate on a qualifying holding and nothing withheld on the way out of the Emirates.
Does free zone status affect the Turkish side?
No. Türkiye withholds under the treaty regardless of how the Emirati parent is taxed at home.
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 call08Where these numbers come from
- https://taxsummaries.pwc.com/turkey/corporate/withholding-taxes checked 2026-08-20
- https://taxsummaries.pwc.com/united-arab-emirates/corporate/taxes-on-corporate-income checked 2026-08-20
- https://taxsummaries.pwc.com/quick-charts/value-added-tax-vat-rates checked 2026-08-20
- https://taxsummaries.pwc.com/quick-charts/withholding-tax-wht-rates checked 2026-08-20