The Türkiye and the United States tax treaty: what leaving profit costs
An American parent taking dividends out of a Turkish subsidiary pays 15% if it holds at least 10% of the shares, and 20% if it holds less. Royalties are the unusual part: the treaty caps them at 5% to 10% against a domestic rate of 20%, which is one of the better royalty positions Türkiye grants anyone.
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 States treaty actually save money?
Türkiye withholds 20% on a royalty with no treaty in place and 5% under this one, so on $500,000 of licence fees paid to a parent in the United States, $75,000 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 5%$25,000
- What the treaty saves on this payment$75,000
02What does it cost to pay a dividend to the United States?
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 States 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 States?
| 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 10%, 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 helps5% | 20% | 5% to 10% | Türkiye's domestic royalty rate is 20%source |
04How does the United States treaty compare with Türkiye's others?
the United States holds the lowest royalty rate of any treaty tracked here at 5%.
- 5%1
- 10%18
- 15%1
Türkiye's treaty dividend rates run from 5% to 20%. The American treaty sits at the top of that range on dividends but near the bottom on royalties, where 5% to 10% is better than most of the network gets. If the group licenses technology into Türkiye rather than taking profit out as dividends, this is one of the better treaties to hold.
05What happens to the money once it lands in the United States?
| In the United States | Rate |
|---|---|
| Corporate tax on ordinary profit | 21% federal, plus state tax of roughly 1% to 10%source |
| VAT, standard rate | No VAT. State and local sales taxes apply insteadsource |
| Withholding tax on dividends to a foreign parent | 30%source |
Türkiye against the United States, measure by measure.
06What catches out groups based in the United States?
- The 10% shareholding threshold is low compared with most of Türkiye's treaties, which usually ask for 25%, so an American parent qualifies for the better dividend rate more easily.
- Royalty payments are where American groups gain most, since the domestic 20% falls to 5% to 10% under the treaty.
- Rates alone do not settle it. Where the intellectual property sits decides whether you are paying royalties at all.
07How does this sit alongside what Türkiye pays the United States groups back?
Withholding is charged on money leaving the company. The export incentive works on money the company spends, and it is paid in cash rather than set against tax, so the two are independent of each other.
| 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
Does the 10% threshold apply to voting shares?
The treaty sets the threshold by shareholding. How your holding is structured decides which side of it you fall on, so it is worth checking before the first distribution rather than after.
Are royalties really cheaper than dividends here?
Under this treaty the royalty cap can be lower than the dividend rate, which is unusual. It matters if the American parent licenses technology to the Turkish company.
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://taxsummaries.pwc.com/united-states/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