Branch Profit Remittance Tax in Turkey: Corporate Tax Article 30/6, 15% Withholding and Treaty Relief

1. A branch is part of the foreign company but taxable in Turkey on Turkish branch profit

A foreign company with a Turkish branch is generally a limited corporate taxpayer. The branch is not a separate legal entity, but the Turkish business profits attributable to the branch are calculated and taxed in Türkiye under domestic law and any applicable treaty.

The branch must maintain Turkish books and tax records sufficient to determine the attributable income and expenses.

The head office remains the same legal entity, but remittance of branch profit receives a separate tax treatment.

2. Article 30(6) creates the branch-profit remittance withholding

Corporate Tax Law Article 30(6) applies to limited taxpayer corporations filing annual or special returns. It taxes the amount transferred to the head office from the branch profit remaining after corporate tax.

The rule is the branch equivalent of a shareholder-level distribution layer in a subsidiary structure.

It should not be confused with withholding on service, royalty or interest payments under other paragraphs of Article 30.

3. The remittance base is after-tax profit, not gross sales

The statutory formula begins with the corporation’s taxable profit before deductions/exemptions for the relevant rule, subtracts corporate tax and focuses on the remaining amount transferred to head office.

Gross branch turnover, VAT collections and customer receipts are not automatically branch-profit remittances.

The accounting entries must distinguish operational payments from profit transfers.

4. The current domestic withholding rate is 15%

The Revenue Administration’s 2026 withholding-rate publication states 15% for Article 30(6) head-office transfers following Presidential Decision No. 9286.

The rate is the domestic-law starting point. An applicable double-tax treaty can reduce Turkish taxation where the treaty contains a lower ceiling.

Use the treaty in force for the period rather than an outdated rate table.

5. A transfer must be analysed by economic/legal character

A bank payment from the branch to the foreign head office can represent purchase reimbursement, service fee, loan repayment, interest, royalty, cost allocation or profit remittance. These categories have different tax rules.

The payment description alone is not decisive. The underlying accounting and contractual basis should show the true character.

Article 30(6) applies to profit transferred to head office, not every outbound payment.

6. Retaining profit in the branch is different from remitting it

The existence of after-tax profit does not necessarily mean the branch has transferred it. Profit can remain in Turkish working capital, bank accounts or branch equity/current accounts.

The timing of the remittance and withholding should therefore be aligned with the actual transfer/accounting event under tax rules.

Year-end planning should identify whether profit will be reinvested or repatriated.

7. Head-office current accounts need clear categorisation

Branches frequently maintain internal current accounts with head office. Entries can reflect operating funding, expense allocations and profit balances.

A reclassification from operational payable to profit remittance can create withholding consequences.

The ledger should be supported by inter-office documentation even though the branch and parent are one legal entity.

8. Double-tax treaties can reduce branch-remittance taxation

Treaties can limit the tax Türkiye may impose on permanent-establishment profits or the additional tax on remittance, depending on treaty wording.

Some treaties mirror dividend ceilings; others have specific PE remittance language or do not provide a separate reduction.

The exact bilateral treaty and protocol must be checked.

9. Treaty residence must be proven

The foreign head office should document its residence in the treaty partner state with an official residence certificate accepted for Turkish tax purposes.

Without residence proof, the branch may need to apply the domestic withholding rate.

Our double-tax treaty guide explains this evidence layer.

10. Branch-profit remittance assumes a Turkish taxable permanent-establishment structure

A formally registered branch is ordinarily a Turkish workplace/permanent establishment. Other foreign companies can create PE exposure even without a registered branch.

Our PE guide addresses that threshold.

Once taxable branch profit exists, Article 30(6) becomes relevant to repatriation.

11. Head-office expense allocations must be separated from profit remittance

A branch can have legitimate allocations of head-office costs where Turkish tax law and treaty principles permit deduction and the expense is properly attributable to the branch.

Unsupported management charges or allocations can be denied or recharacterised.

The branch should retain invoices, allocation keys and evidence of services/benefit.

12. Interest and royalty payments follow their own withholding rules

A payment to head office for a loan or intellectual property should not be automatically classified as branch profit. It can be interest or royalty subject to separate Corporate Tax Law Article 30 provisions and treaty articles.

The payment can also face transfer-pricing analysis.

The branch’s internal legal structure makes head-office transactions technically complex and should be documented carefully.

13. Related-party financing can create thin-capital or transfer-pricing consequences

Where the branch structure uses related financing, the allocation and deductibility of interest should be tested under Turkish corporate-tax and treaty rules.

Our thin-capitalisation guide explains the Turkish debt/equity framework for companies; branch cases require their own legal application.

Economic substance is more important than account labels.

14. Foreign-currency remittance still requires Turkish tax recording

The branch can remit profit in foreign currency through banking channels, but the taxable calculation and withholding must be recorded in Turkish tax/accounting terms.

Exchange-rate differences between profit determination and remittance can require accounting treatment.

Bank KYC/source documentation should reconcile with the branch’s tax records.

15. A branch-remittance file should be reproducible

Keep audited/approved branch financials, corporate tax return, after-tax profit calculation, head-office account, transfer instruction, bank SWIFT, withholding return, residence certificate and treaty memo.

The amount remitted should reconcile exactly with the withholding base.

Unexplained inter-office transfers are difficult to defend in audit.

16. Branch remittance and subsidiary dividend are similar economically but legally different

A subsidiary distributes profit to a shareholder. A branch remits the foreign company’s own Turkish branch profit to its head office.

Both have a 15% domestic withholding starting point under current rules, but the legal provisions and treaty analysis differ.

Our branch vs subsidiary guide compares the structures.

17. Closing a branch can require final profit and balance analysis

Before deregistration, remaining assets, liabilities, taxes and head-office balances should be resolved. Amounts transferred on closure should be classified as capital return, payable settlement or profit remittance as appropriate.

The tax office and trade registry closure records should be coordinated.

Bakırcı & Keskin Hukuk Bürosu has one physical office in Mersin. Corporate/tax matters throughout Türkiye can be coordinated from Mersin subject to competent authorities and courts.

Conclusion

Branch-profit remittance tax is not a tax on every outbound branch payment. Article 30(6) focuses on after-tax branch profit transferred to head office. The current domestic withholding rate is 15%, subject to treaty reduction where the legal conditions and residence evidence are satisfied.