# Turkey withholding tax on services: rates and treaty relief

URL: https://fincodelabs.com/en/blog/turkey-withholding-tax-on-services · Publisher: Fincode (Fincode Yazılım ve Teknoloji A.Ş.), Istanbul, Turkey · Category: Money in Turkey · Published: 2026-11-06 · Updated: 2026-11-06

Turkey withholding tax on services paid abroad: the 20% heads, GİB rulings on software, muhtasar filing, gross-up math and treaty relief with Forms 1 to 3.

**Short answer:** **Turkey's withholding tax on services** paid to non-residents is generally 20% on professional fees (*serbest meslek*) and payments for rights, withheld by the Turkish payer under Decisions 2009/14593 and 2009/14592 (consolidated texts read 6 November 2026). A foreign company's ordinary commercial income is not on the list, and Revenue Administration (GİB) rulings treat ready-made software used unchanged as commercial income with no withholding, while custom development and purchases of rights are caught. Under Treaty Communiqué No. 4, professional work by a treaty resident who does not come to Turkey is generally taxed only at home, provided the payer holds a residence certificate.

This guide is for a foreign contractor or SaaS vendor billing a Turkish client, and for the Turkish payer: whether a service fee is caught and how to claim relief.

This is general information. How a software payment is classified depends on the facts and can be disputed, so take advice from a Turkish tax adviser and check the credit rules in your home country. Dividends and deposit interest are in [Turkey dividend withholding tax](https://fincodelabs.com/en/blog/turkey-dividend-withholding-tax) and [Turkish lira deposit rates](https://fincodelabs.com/en/blog/turkish-lira-deposit-rates-tax).

## Does Turkey have withholding tax on foreign service payments?

Yes, but only for the income heads the law lists, and a fee can be Turkish-source even when the work is done entirely abroad.

A non-resident company is taxed only on Turkish-source income, under Corporate Tax Law Article 3, which borrows the Income Tax Law's source rules. Under Income Tax Law Article 7(4), professional income is earned in Turkey if the activity is performed there *or is valued there*, and valuing means payment in Turkey, or payment abroad charged to the Turkish payer's accounts or set against its profit. A consultant in Berlin with an Istanbul client can therefore meet the domestic test, which is why treaties matter.

Commercial income works differently: under Article 3(3)(a) and Income Tax Law Article 7(1) it is taxed only through a Turkish workplace or permanent representative, and Article 30(1) has no general head for commercial services. So for most vendors the question is whether the fee is professional, commercial or a payment for rights.

Article 30(10) treats booking the debt as payment, so the duty can arise before cash moves; Article 94 applies the same logic to individuals. Withholding on rent to resident landlords is separate; see [rental income tax](https://fincodelabs.com/en/blog/turkey-rental-income-tax).

## Turkey withholding tax rate by payment type

Article 30 says 15%, but the President can set other rates, and the decisions in force set 20% for professional fees and rights payments.

**Withholding on payments to non-residents, read 6 November 2026. Domestic rates, before any treaty**

| Payment | Non-resident company | Individual | In force from |
| --- | --- | --- | --- |
| Professional services | 20% (2009/14593, item 2/b) | 20% (2009/14592, item 2/b) | 3 February 2009 |
| Work of the kind in Income Tax Law Article 18, such as authors and computer programmers | Not a separate head | 17% (2009/14592, item 2/a) | 3 February 2009 |
| Licensing or hiring out rights listed in Income Tax Law Article 70, such as trademarks, know-how and secret formulas | 20% (2009/14593, item 3/b) | 20% (2009/14592, item 5/a) | 3 February 2009 |
| Sale or assignment of copyright, patents and similar intangible rights | 20% (2009/14593, item 11) | 20% on copyright and patent sales (2009/14592, item 4) | 3 February 2009 |
| Internet advertising services, to the provider or an intermediary | 15% (2009/14593, item 15/a) | 15% (2009/14592, item 17/a) | 1 January 2019 (Decision 476) |
| Multi-year construction and repair | 5%; 1% for rail, ships and, from 1 June 2026, nuclear plants | Same | 1 April 2025 (Decision 9707) |
| Ordinary commercial income with no Turkish permanent establishment | No Article 30(1) head | No Article 94 head | Not applicable |

The rates come from GİB's consolidated texts of [Decision 2009/14593](https://gib.gov.tr/mevzuat/kanun/435/bkk/1379) and [Decision 2009/14592](https://gib.gov.tr/mevzuat/kanun/433/bkk/1232), which carry amendments up to Decision 11344 (Resmî Gazete, 19 May 2026); GİB listed no later amendment on 6 November 2026, and none changed the 20% rows except a temporary 10% on individuals' item 5/a from 31 July 2020 ([Decision 2813](https://www.resmigazete.gov.tr/eskiler/2020/07/20200731-5.pdf)), now lapsed. Article 30(7) adds 30% for payments to entities in countries the President declares, but GİB lists no such declaration.

## Service fee or royalty: how GİB classifies software payments

Neither Article 30 nor the decisions mention software or SaaS, but GİB's published rulings (*özelge*) sort software payments three ways: ready-made software used unchanged is commercial income, custom work is professional income, and rights to exploit a program are intangible rights.

**What GİB's rulings decided, read 6 November 2026. Each applies only to its own facts**

| Payment in the ruling | Domestic result | Treaty result |
| --- | --- | --- |
| Video-call software bought as a use service from an Irish company ([Bursa, 22 April 2024](https://gib.gov.tr/mevzuat/kanun/435/ozelge/28599)) | Commercial income, no withholding | Article 7: no Turkish tax without a permanent establishment |
| Ready-made programs used or resold unchanged, not copied ([Ankara, 1 November 2023](https://gib.gov.tr/mevzuat/kanun/435/ozelge/27552); [Istanbul, 24 May 2023](https://gib.gov.tr/mevzuat/kanun/435/ozelge/29630)) | Commercial income, no withholding | Article 7, same |
| Web server hosting from a Dutch company ([Istanbul, 12 July 2013](https://gib.gov.tr/mevzuat/kanun/435/ozelge/28645)) | Commercial income, no withholding | Article 7, same |
| A program written for this customer, or an existing one changed for it (the 2023 rulings) | Professional income, 20% | Canada: no Turkish tax on work done without coming to Turkey |
| Rights to copy, change, distribute or display a program (the 2023 rulings) | Intangible right, 20% | Canada, Article 12: capped at 10% |
| Development, a use licence, installation, training and support with no separate prices, from a Polish company ([Istanbul, 21 October 2022](https://gib.gov.tr/mevzuat/kanun/435/ozelge/28602)) | Intangible right, 20% | Article 12: capped at 10% |
| Technical support and consulting from a Dutch group company ([Istanbul, 10 October 2022](https://gib.gov.tr/mevzuat/kanun/435/ozelge/27560)) | Professional income | No withholding if done without coming to Turkey |

**Where the rulings do not line up.** The Polish ruling treats a use-only licence bundled with development as a rights payment, while the Irish one treats a use service as commercial income, and a search of all GİB's published rulings on 6 November 2026 found none using the word SaaS. The facts that moved the result were whether the customer could change or copy the program, whether work was done for that customer, and whether extras were priced separately. Treat a SaaS subscription as unsettled until you have advice or a ruling.

A payer can ask GİB in writing for its own ruling under Tax Procedure Law Article 413; under Article 369, if that written answer proves wrong, any tax is assessed without penalties or late-payment interest. Do not shape an invoice to reach a lower head; the description must match the real transaction.

## Who files: the payer, on the muhtasar return

The Turkish payer withholds, reports and pays; a non-resident whose non-commercial Turkish income was fully withheld normally files nothing.

- **Return and date.** Corporate Tax Law Article 31 and Income Tax Law Article 98 require the muhtasar return (*muhtasar ve prim hizmet beyannamesi*). GİB's 2026 calendar shows the 26th of the following month, so October 2026 payments are due on 26 November 2026.
- **Seller.** Communiqué No. 4 (section 4.2.1), relying on Income Tax Law Article 86 and Corporate Tax Law Article 30(9), calls the withholding the final tax on a non-resident's professional income; see [Turkish tax number for foreigners](https://fincodelabs.com/en/blog/turkish-tax-number-for-foreigners) for when a number is asked for.
- **Proof.** Agree in the contract what the payer sends you, because your home authority decides what evidence supports a credit.

## Gross-up: what a net-of-tax clause costs

If the Turkish payer bears the tax, Article 30(11) calculates it on the amount paid plus the tax itself, so the payer's cost rises by more than the headline rate.

> **Hypothetical invoice, not a tax position:** a foreign company's fee of TRY 100,000 treated as a 20% head, with the 10% case assuming a treaty cap applies and the certificate is held.
>
> | Contract says | Gross | Withheld | Seller receives | Payer's cost before VAT |
> | --- | ---: | ---: | ---: | ---: |
> | TRY 100,000 gross, 20% | 100,000.00 | 20,000.00 | 80,000.00 | 100,000.00 |
> | TRY 100,000 net of tax, 20% | 125,000.00 | 25,000.00 | 100,000.00 | 125,000.00 |
> | TRY 100,000 net of tax, 10% | 111,111.11 | 11,111.11 | 100,000.00 | 111,111.11 |
>
> Formula: gross = net ÷ (1 − rate).

Settle before signing who bears the tax and who bears the risk if GİB later takes a different view of the head, because an unwithheld payment leaves the payer exposed. Under a [GİB ruling of 8 May 2023](https://gib.gov.tr/mevzuat/kanun/434/ozelge/25747), the buyer books a foreign-currency invoice at the central bank's forex buying rate on its date.

## How a tax treaty removes or cuts the charge

A treaty overrides the domestic rate where it allocates the income to the seller's country or caps Turkish tax, and [Treaty Communiqué No. 4](https://www.resmigazete.gov.tr/eskiler/2017/09/20170926-13.htm) (Resmî Gazete, 26 September 2017, No. 30192) sets the steps for services.

**Professional services under Communiqué No. 4, section 4.2.2**

| Situation | Withholding |
| --- | --- |
| Seller works without coming to Turkey | None under the general rule, unless the payment is for intangible rights; Forms 1 and 2 are not needed |
| Work in Turkey, and Turkey clearly has no taxing right | None, if the seller gives Form 1 within 30 days of the start and the payer files Form 2, Form 1 and any contract with its tax office before the first payment |
| Work in Turkey, length unclear when paying | Payer must withhold; the seller can claim a refund |
| Work later passes the treaty's time limit | Payer withholds, covering earlier periods too |
| Fixed place in Turkey, or work in Turkey paid by a Turkish resident under treaties like Sweden's | Domestic rules, unless the treaty limits them |

**Three treaties, read 6 November 2026**

| Treaty | Royalties cap | Individuals' independent services | Company staff in Turkey |
| --- | --- | --- | --- |
| United Kingdom (1988) | 10% | Fixed base, or 183 days in any 12 months | Article 14(2): permanent establishment, or over 183 days in any 12 months |
| Germany (2011) | 10% | Fixed base, or 183 days in any 12 months | Article 5(3)(b): over six months in any 12, same or connected project |
| United States (1996) | 10%; 5% for equipment | Fixed base, or over 183 days in any 12 months | Article 14(2): permanent establishment, or over 183 days in any 12 months |

All three limit business profits to a permanent establishment. Whether a company's professional work falls under Article 14 or Article 7 depends on the treaty: GİB applied [Article 14 to a Finnish company](https://gib.gov.tr/mevzuat/kanun/435/ozelge/28598) but Articles 5 and 7 to the Canadian one. See [Turkey tax treaties](https://fincodelabs.com/en/blog/turkey-tax-treaties).

**Residence certificate.** Section 3.3.2 asks for the original from the home authority, with a Turkish translation certified by a notary or a Turkish consulate there, given to the payer or the tax office. A certificate for one calendar year is valid until the fourth month of the next, and without one domestic law applies, so collect it before the first payment.

**Refunds.** Section 5 lets a seller taxed despite the treaty apply to the tax office within the correction time limit unless the treaty sets its own, with the certificate and Form 3.

## The reverse-charge VAT the payer also handles

A service performed or used in Turkey is subject to Turkish VAT even when the seller is abroad, and the Turkish recipient reports all of it on the No. 2 VAT return, on top of any withholding.

VAT Law Articles 1, 6(b) and 9 set the rule, and GİB's VAT communiqué says the recipient reports the whole tax even if it is not itself a VAT taxpayer; its examples include computer software services supplied from abroad. The Irish ruling above applies this to video-call software and lets the buyer deduct the VAT on its No. 1 return. A service both performed and used abroad is outside VAT ([Ankara, 1 October 2025](https://gib.gov.tr/mevzuat/kanun/435/ozelge/38764)). GİB's 2026 calendar dates the No. 2 return on the 25th of the following month; 25 November 2026 for October.

Foreign providers selling electronic services to private individuals are the exception: they register at digitalservice.gib.gov.tr and file the No. 3 return themselves. Rates are in [Turkey VAT rate](https://fincodelabs.com/en/blog/turkey-vat-rate-and-refund), and the seller's invoice format is in [Turkey e-invoice](https://fincodelabs.com/en/blog/turkey-e-invoice). Put both taxes in the commercial terms when a Turkish party pays; they do not fall on a foreign company that pays a Turkish developer, for example for Fincode's [white-label development](https://fincodelabs.com/en/services/white-label-development).

## Frequently asked questions

### What is the Turkey withholding tax rate on professional services?

20% for non-resident companies and individuals under Decisions 2009/14593 and 2009/14592, read on 6 November 2026, with 17% for individuals in Article 18 work. A treaty may reduce or remove it.

### Is a service performed outside Turkey subject to Turkish withholding?

Domestic law can catch it if the fee is paid in Turkey or charged to a Turkish payer's accounts. Under Communiqué No. 4, a treaty resident who works without coming to Turkey is generally taxed only at home, with a residence certificate.

### Is there withholding on SaaS paid from Turkey?

No GİB ruling found on 6 November 2026 uses the word SaaS. A Bursa ruling of 22 April 2024 found commercial income and no withholding on video-call software bought as a use service, while an Istanbul ruling of 21 October 2022 treated a use licence bundled with development as a rights payment.

### How do I claim a treaty rate on a Turkish payment?

Give the Turkish payer the original residence certificate from your home tax authority with a certified Turkish translation before payment. Without it, the payer applies the domestic rate and you must claim a refund with Form 3.

## Sources

- [Mevzuat: Corporate Tax Law No. 5520, Articles 3, 30 and 31 (Turkish)](https://www.mevzuat.gov.tr/MevzuatMetin/1.5.5520.pdf)
- [Mevzuat: Income Tax Law No. 193, Articles 7, 18, 70, 86, 94 and 98 (Turkish)](https://www.mevzuat.gov.tr/MevzuatMetin/1.4.193.pdf)
- [GİB: Decision 2009/14593, consolidated, rates under Corporate Tax Law Article 30 (Turkish)](https://gib.gov.tr/mevzuat/kanun/435/bkk/1379)
- [GİB: Decision 2009/14592, consolidated, rates under Income Tax Law Article 94 (Turkish)](https://gib.gov.tr/mevzuat/kanun/433/bkk/1232)
- [Resmî Gazete: Double Taxation Treaties General Communiqué No. 4, 26 September 2017, No. 30192 (Turkish)](https://www.resmigazete.gov.tr/eskiler/2017/09/20170926-13.htm)
- [GİB ruling: Bursa, 22 April 2024, software use service from an Irish company (Turkish)](https://gib.gov.tr/mevzuat/kanun/435/ozelge/28599)
- [GİB ruling: Ankara, 1 November 2023, software from a Swedish company (Turkish)](https://gib.gov.tr/mevzuat/kanun/435/ozelge/27552)
- [GİB ruling: Istanbul, 24 May 2023, website software from a Canadian company (Turkish)](https://gib.gov.tr/mevzuat/kanun/435/ozelge/29630)
- [GİB ruling: Istanbul, 21 October 2022, software and licence from a Polish company (Turkish)](https://gib.gov.tr/mevzuat/kanun/435/ozelge/28602)
- [Mevzuat: Tax Procedure Law No. 213, Articles 369 and 413 (Turkish)](https://www.mevzuat.gov.tr/MevzuatMetin/1.4.213.pdf)
- [GİB: 2026 tax calendar (Turkish)](https://cdn.gib.gov.tr/api/gibportal-file/file/getFileResources?objectKey=arsiv/onceki-dokumanlar/2026_vergi_takvimi.pdf)
- [GOV.UK: 1988 UK-Turkey Double Taxation Agreement](https://www.gov.uk/government/publications/turkey-tax-treaties/1988-uk-turkey-double-taxation-agreement-in-force)
- [German Bundestag: Printed paper 17/8841 with the Germany-Turkey treaty of 19 September 2011](https://dserver.bundestag.de/btd/17/088/1708841.pdf)
- [IRS: United States-Turkey income tax treaty](https://www.irs.gov/pub/irs-trty/turkey.pdf)
- [GİB: VAT General Implementation Communiqué, consolidated text, section I/C-2.1.2.1 (Turkish)](https://cdn.gib.gov.tr/api/gibportal-file/file/getFile?objectKey=MEVZUAT_TEBLIGLER%2FUNIVERSAL%2F2026%2Fkdv_genteb.pdf)

> This guide is general information, not investment, legal or tax advice. Amounts, rates and rules in Turkey change often: check the date given for each figure and the official source before you rely on it, and ask a licensed adviser about your own situation. Sources, checks and corrections: see the [editorial policy](https://fincodelabs.com/en/editorial-policy).

---

Published by Fincode (Fincode Yazılım ve Teknoloji A.Ş.), a software company in Istanbul, Turkey: https://fincodelabs.com/en/blog/turkey-withholding-tax-on-services

Cite as: Fincode, "Turkey withholding tax on services: rates and treaty relief", updated November 6, 2026, https://fincodelabs.com/en/blog/turkey-withholding-tax-on-services