The Türkiye and the United Kingdom tax treaty: what leaving profit costs
A British parent pays 15% on dividends from a Turkish subsidiary if it holds at least a quarter of the shares, and 20% otherwise. Interest is capped at 15% and royalties at 10%. The threshold is higher than the American one, so a minority British holding pays the full 20%.
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 United Kingdom 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 the United Kingdom, $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 the United Kingdom?
This treaty caps Türkiye at 15% to 20% and Türkiye already charges 15% at home, so paying a dividend to a parent in the United Kingdom 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 the United Kingdom?
| 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% | 15% | The treaty allows Türkiye up 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 United Kingdom treaty compare with Türkiye's others?
the United Kingdom 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
Against a network that runs from 5% to 20% on dividends, the British treaty is ordinary: 15% on a qualifying holding, 20% below it, and no relief on interest to speak of at 15%. Germany, Finland and Spain all do better on dividends, which matters if the group has a choice about where the parent sits.
05What happens to the money once it lands in the United Kingdom?
| In the United Kingdom | Rate |
|---|---|
| Corporate tax on ordinary profit | 25%, or 19% on profits under £50,000Marginal relief applies between £50,000 and £250,000.source |
| VAT, standard rate | 20%source |
| Withholding tax on dividends to a foreign parent | 0%source |
Türkiye against the United Kingdom, measure by measure.
06What catches out groups based in the United Kingdom?
- The 25% shareholding threshold is stricter than the American 10%, so a smaller British stake pays the higher rate.
- Interest at 15% is at the top of Türkiye's treaty range, which matters if the parent funds the subsidiary by loan rather than by equity.
- The UK charges nothing on dividends leaving the UK, so the direction of travel is not symmetrical.
07How does this sit alongside what Türkiye pays the United Kingdom groups back?
This governs what it costs to move profit to the parent. The export incentive is unrelated to it: a cash reimbursement against invoices the Turkish company has already paid, which does not depend on profit or on distributions.
| 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
Is a 25% holding worth structuring for?
It is the difference between 15% and 20% on every distribution, so on a company distributing regularly it pays for the structuring quickly.
What if we fund the Turkish company by loan?
Interest to a UK lender is capped at 15% under the treaty, which is higher than several other treaties allow, so the funding choice has a real cost attached.
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 2026-08-20
- https://www.gov.uk/corporation-tax-rates checked 2026-08-20
- https://www.gov.uk/vat-rates checked 2026-08-20
- https://www.gov.uk/guidance/dividends-and-tax checked 2026-08-20