FATCA in Turkey

For the application of FATCA, international bilateral agreements have been signed between the United States and other countries for the purpose of exchanging information. The FATCA Agreement was signed between the Republic of Turkey and the Government of the United States on July 29th, 2015. Following the ratification of the FATCA Agreement by the Turkish Parliament, FATCA did become national legislation.

In accordance with FATCA, the financial entities outside the US were required to identify their customers who may be taxpayers in the US. They were asked to obtain the required information and documents from their customers and report the asset information of these customers to the Turkish Ministry of Finance – Revenue Administration. The ratification of FATCA by the Turkish Parliament was given an obligation over the financial institutions to provide information regarding the real persons who are associated with the United States or even as a citizen, resident in US or green card holder, and the legal persons who are associated with the United States. It would mean that they have a US address, established or headquartered in the US.

As per FATCA and FATCA Agreement signed between the US and Turkey, ratified on March 16th, 2016 with the publication of Law No. 6677 which approved the Agreement between the Government of Turkey and the Government of the United States of America to Improve International Tax Compliance Through Enhanced Exchange of Information in the Official Gazette dated March 16th, 2016 and No. 29655. This was for the natural and legal entities who do not provide the information and documents required to identify whether or not they are taxpayers in the US, and refuse to declare their taxpayer status, a 30% withholding tax over their US source income may be imposed by the US or the authorized bodies entitled to withhold tax on behalf of the US.