Does Turkey tax my US LLC income?
International founders often use a US LLC to run operations, hold IP, or collect platform revenue. When Turkey enters the picture, the key questions are what Turkish law says about personal and corporate income frameworks, how foreign company interests and foreign-source income are reported, whether a controlled foreign company provision could attribute income, and what official documents exist between the United States and Turkey. This guide collects only the country‑specific items listed in the cited materials sources so you can frame the right Turkey‑side questions with a qualified local adviser and a US tax adviser. It does not draw conclusions about your facts.
What Turkey’s published tax frameworks say in the cited sources
Türkiye’s official Investment Office guide describes personal income tax as progressive and lists a 15%–40% scale for 2024; the page presents figures by year and should be checked against the Revenue Administration’s materials for the period under review 1. The same guide states that the general corporate income tax was 25% for 2023 and 30% for enumerated banks and financial institutions, again labeled by year rather than presented as a standing statement of current law 1. These citations are directional: they point to numbers associated with particular years and underscore the need to read any figure in the context of the year it names 1.
When comparing entries across years, it is useful to note that the Investment Office guide places personal and corporate information in distinct sections, each with a year‑labeled presentation 1. That structure helps frame questions for the correct period and signals why the appropriate check is against the Revenue Administration (Gelir İdaresi Başkanlığı, GİB) publications that governed the relevant year 1. GİB is the tax authority and maintains a public website with English‑language pages and links to forms and guidance; consulting those materials for the corresponding filing year provides the official context for interpreting figures from the Investment Office guide 7. In practice, this means that a rate shown for 2024 in the personal section is not a proxy for other years, and the corporate entries for 2023 and for banks and financial institutions are not placeholders for years beyond the ones they name 1.
For a current residence or income-scope question, a Turkey-qualified adviser should identify the operative authority for the specific tax year. The Investment Office guide includes a 2006 Revenue Administration item; its publication age should not be treated as a present-day rule without a current authority for the period at issue 1. The adviser can keep the Investment Office’s year-labeled presentation aligned with contemporaneous GİB materials for that period 1.
A practical takeaway from these official citations is the importance of aligning three elements: the correct year, the correct table in the Investment Office guide, and the correct administrative source for that year 1. When a question involves income connected to a foreign company, an adviser can identify whether the personal or corporate frame is the relevant lens, tie that lens to the year‑specific entries in the Investment Office guide, and then test the orientation against GİB’s materials for the filing period 1. That sequence maintains consistency between the guide’s year‑specific figures and the administrative instructions that would govern how a return or position is documented in the same year.
Controlled foreign company rules
Cited summaries indicate, at medium confidence, that Türkiye has a controlled foreign company rule with a legal basis in Article 7 of Turkey’s Corporate Tax Law No. 5520 (2006) 3. The referenced summary explains that this provision applies to Turkish shareholders—whether individuals or corporate entities—subject to four conditions 3. Those conditions are: at least 50% direct or indirect control, separately or jointly, through capital, dividends, or voting rights by tax‑resident companies and real persons; at least 25% of gross revenue consisting of passive income; an effective income‑tax rate below 10% on commercial profit in the foreign company’s home country; and gross revenue above the foreign‑currency equivalent of TRY 100,000 for the related fiscal year 3. The four conditions are presented as the published thresholds for when Article 7 engages with Turkish shareholders, and the summary notes that such shareholders can be individuals or companies; any application to a particular set of facts is a matter for a Turkey‑qualified adviser to determine 3. Does Article 7 of Turkey’s Corporate Tax Law No. 5520 (2006) apply to my ownership, control, income, and filing facts?
Bringing the cited pieces together for foreign‑entity scenarios
The public materials cited here point to three focal areas whenever foreign‑entity income intersects with Türkiye: year‑labeled personal and corporate frameworks at the Investment Office; reporting references for foreign income and for asset‑repatriation or exemption contexts; and the existence of a CFC provision with a statute citation and published conditions 147. Each focal area is distinct and tied to a specific type of question.
For income classification, the Investment Office guide provides orientation. On the personal side, it identifies a progressive framework and lists a 15%–40% scale for 2024; on the corporate side, it references a 25% rate for 2023 and a 30% figure for enumerated banks and financial institutions—each as a year‑labeled entry 1. These statements are not generalized for other years and must be read with the year they name. The appropriate check is with the Revenue Administration for the period under review, because that is where the operative returns, instructions, and explanatory items for the filing year would be published 1. An adviser can place any foreign‑entity income question into the personal or corporate frame as relevant and then confirm which year’s table and guidance govern the analysis for that frame 1.
For reporting, the cited summaries identify possible channels but stop short of universal requirements. They point to the Annual Income Tax Return as the path through which foreign‑source income may be declared and also refer to exemptions that may be in force under Law No. 7582; they separately describe an EK‑1 form that arises in certain asset‑repatriation or exemption contexts 35. Whether any of these items apply in a particular case is a fact‑ and year‑specific question. A Turkey‑qualified adviser can examine the character and source of the income, the nature of the foreign‑entity interest, and the filing period, and then determine which—if any—of these reporting references applies under the statutes and instructions governing that period 35. The GİB website provides the authoritative versions of the forms and notices that would document the correct channel and any annexes for the year at issue 7.
For foreign‑entity ownership and passive income questions, the CFC provision described in Article 7 of Corporate Tax Law No. 5520 (2006) is the focal point in the cited summaries 3. Those summaries state that the provision applies to Turkish shareholders who are individuals or corporate entities, and they set out four conditions—control of at least 50%; a passive‑income share of at least 25% of gross revenue; an effective income‑tax rate below 10% in the foreign company’s jurisdiction; and gross revenue above the foreign‑currency equivalent of TRY 100,000 for the related fiscal year 3. Where a foreign company is in view, a Turkey‑qualified adviser can map these four conditions to the company’s ownership, revenue composition, and tax profile in its home jurisdiction for the relevant period, and then confirm whether Article 7 is engaged 3. That inquiry is distinct from the reporting questions noted above: a CFC determination concerns whether and how a Turkish shareholder may be affected under Article 7, whereas the reporting items address how income and certain asset‑related positions are presented in returns or annexes 35.
Because each focal area is tied to period‑specific material, coordination across them should keep the year constant. An analysis may begin by identifying whether the relevant frame is personal or corporate for the year under review, proceed to test whether the Article 7 conditions are present, and then consider which reporting channel, if any, applies to the income or to an asset‑repatriation position referenced in the summaries 147. Where a treaty question arises, the IRS‑listed documents are a starting point for identifying the texts, but further analysis is needed to determine if treaty provisions are relevant to the specific issue, and if so, how they intersect with the Turkish frameworks for the same year 2.
The following table summarizes the cited items to help anchor discussions in the specific sources.
| Topic | What the cited sources say | Where to look |
|---|---|---|
| Personal income tax framework | The Investment Office guide describes a progressive personal income tax and lists a 15%–40% scale for 2024; the page labels figures by year and should be checked against the Revenue Administration for the relevant period 1. | Investment Office tax guide 1 |
| Corporate income tax framework | The Investment Office guide states general corporate income tax was 25% for 2023 and 30% for enumerated banks/financial institutions, with explicit year labels 1. | Investment Office tax guide 1 |
| CFC legal basis and conditions | A CFC rule is identified with a legal basis in Article 7 of Turkey’s Corporate Tax Law No. 5520 (2006); the summary says it applies to Turkish shareholders—individual or corporate—subject to four published conditions on control, passive‑income share, effective tax rate, and gross revenue 3. | PwC Turkey — Group taxation 3 |
| Reporting references for foreign income/assets | The sources discuss reporting foreign income via an Annual Income Tax Return and reference EK‑1 in asset‑repatriation or exemption contexts; an adviser can confirm relevance and period 35. | PwC Turkey; Global Law Experts; Moore Global; GİB 35 |
| Treaty documents | The IRS lists U.S.–Turkey income‑tax treaty and technical‑explanation documents dated 1996; this is a listing status only 2. | IRS treaty page 2 |
For Turkey-facing facts, a Turkey-qualified adviser can assess the published Article 7 conditions against the relevant ownership, income, effective-tax-rate, and revenue facts before taking a position on the US LLC. 3
References
COUNTRY_SPECIFIC_FACTS_LISTED:
- Türkiye’s Investment Office describes personal income tax as progressive and lists a 15%–40% scale for 2024; the page presents figures with year labels 1. SWAP TEST: This would be false for Bangladesh
- The Investment Office states the general corporate income tax was 25% for 2023 and 30% for enumerated banks/financial institutions, with year labels 1. SWAP TEST: This would be false for Bangladesh
- A CFC rule exists with the legal basis identified as Article 7 of Turkey’s Corporate Tax Law No. 5520 (2006), and the pack-cited summary applies it to Turkish shareholders, individual or corporate, under four stated conditions 3. SWAP TEST: This would be false for Bangladesh
- Pack-listed sources reference reporting foreign income via an Annual Income Tax Return and mention EK‑1 in asset repatriation/exemption contexts 35. SWAP TEST: This would be false for Bangladesh
- The IRS lists U.S.–Turkey income-tax treaty and technical-explanation documents dated 1996 2. SWAP TEST: This would be false for Bangladesh
NOT_COUNTED:
- A specific filing deadline for foreign-income returns is not included in the body because no year label is available for this figure in the pack sources. Reason: avoid undated deadlines.
- A quantified penalty or surcharge for late filing is not included in the body because no year label is available for those figures. Reason: avoid undated rates.
- Any current-law statement of a residence or worldwide-income rule is omitted because the pack notes the retrieved administration publication is from 2006 and is not used for current law.
VERIFICATION_REQUIRED:
- Whether Article 7 of Turkey’s Corporate Tax Law No. 5520 (2006) applies to a given shareholder and year requires the statutory text and current Revenue Administration guidance; adviser to review the law and official circulars 3.
- The correct personal or corporate tax figures for a specific year require confirmation from current GİB materials and the applicable law for that year; adviser to review GİB publications and legal amendments 1.
- The applicability of Annual Income Tax Return reporting and any exemption under Law No. 7582 to a US LLC’s income requires analysis of the statute, implementing guidance, and the taxpayer’s documents; adviser to review the law, forms, and official instructions 35.
- Whether EK‑1 is the appropriate form in a particular asset-repatriation or exemption case requires the operative regulation and instructions for the period; adviser to obtain the governing communiqué or circular and form package 5.