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HMRC internal manual

Double Taxation Relief Manual

HM Revenue & Customs
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Turkey: Underlying Tax

(1) Documents needed to support the underlying tax claim

The accounts showing the profit out of which the dividend was paid and the notice of assessment showing the final liability to tax will be required by the Underlying Tax Group.

Relevant profits are reduced by transfers of 5% of historical statutory profit until the reserve reaches 20% of share capital (the first legal reserve). The second legal reserve reduces relevant profits by transfers of 10% of all cash distributions in excess of the historical paid-in share capital.

The legal reserves are not available for distribution unless they exceed 50% of the historical paid-in share capital.

(3) Spared taxes

A copy of the certificate granting tax spared status and the relevant page(s) of the company’s tax computation showing the spared tax should be sent to the Underlying Tax Group in addition to the documents mentioned above.