Are the interests paid to companies abroad and the amounts paid to the group company in return for loan guarantees subject to tax deduction?
Interest payments made to companies abroad and expenses such as commissions paid in return for guarantor service are considered as receivable interest within the framework of financing services, in accordance with the subparagraph (ç) of the first paragraph of Article 30 of the Corporate Tax Law No. 5520, a 10% tax deduction is made pursuant to the Council of Ministers Decision No. 2009/14593.
In addition, the financial services between group companies can be criticized in terms of hidden income or they can be the subject of concealed capital.
Pursuant to the Council of Ministers Decision No. 2009/14593, 0% tax is deducted from the interest paid in return for the loans used from foreign banks and financial institutions.
Source: Revenue Administration of Turkey – Translated by: Karen Audit
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