Turkey’s Financial Institutions to Share Resident Information Abroad
In a significant move towards enhancing transparency and combating tax evasion, Turkey’s Ministry of Treasury and Finance Revenue Administration has announced that financial institutions in the country will start sharing information about residents’ accounts with foreign authorities.
Automatic Exchange of Information
Under this new arrangement, Turkish banks and other financial institutions will notify the Ministry of Treasury and Finance Revenue Administration about account information, which will then be shared with relevant countries via a secure electronic network. Similarly, foreign countries that have agreements with Turkey will also send similar information to our country’s tax authorities.
Information to be Shared
The following information will be exchanged:
- Name and surname
- Address
- Country of residence and tax identification number (TIN)
- Birth place and date
- Account number and balance or value
- Total gross amount of income, such as interest, dividends paid to the account during the year
Exceptions
Real estate and vehicle information will not be included in this automatic exchange.
Notification Process
The notification process will start with newly opened accounts, and financial institutions will check their records for existing accounts. If a foreign resident has multiple accounts in Turkey, only one set of information will be shared.
Company Accounts
In cases where a Turkish citizen has companies abroad, the company’s account information may be subject to automatic exchange if the income is mainly composed of passive income (more than 50%) and the share of the foreign country resident in the company partnership is more than 25%.
Double Taxation
To alleviate concerns about double taxation, the Revenue Administration has assured that there will be no double taxation due to this automatic exchange. The resulting income can be taxed either in Turkey or in the country where it was earned, and tax paid in one country can be deducted from taxes payable in another.
Guide to Notification
For detailed information on how closed, active, or passive accounts and joint accounts will be subject to notification, please refer to the Guide provided by Çukur&Partners Law Firm.
Limitations
Account transactions such as real estate lease payments and debt payments that are deposited into a deposit account during the year are not within the scope of automatic information exchange.
Compliance with Personal Data Protection Law
This automatic exchange does not constitute a violation of the Personal Data Protection Law No. 6698, since it is carried out under an international agreement based on reciprocity principle.
Contact Information
For more information and guidance on this development, please contact Çukur&Partners Law Firm.
Best regards, Çukur&Partners Law Firm