Withholding Tax Rate in Real Estate Rentals was reduced to 10%
Through the promulgation of the President Decree No. 2813 (“Decree”), published in the Official Gazette dated 31 July 2020 and No. 31202, the withholding tax rate in real estate rentals is reduced to 10% until 31 December 2020.
Through the Decree; it is regulated that 10% withholding will be made instead of 20% for the below mentioned items until 31 December 2020:
- Payments made in return for the lease of the goods and rights stated in Article 70 of the Income Tax Law,
- Rental payments made to foundations (except for chartered foundations) and leases of real estates belonging to associations,
- Rental payments made to foreign states in return of the lease of properties that do not have diplomatic status for foreign public administrations and organizations and international organizations.
As of January 1st, 2021, pre-Decree rates (20%) will be re-applied.
The Decree entered into force on the date of its publication and it will be applied to payments made in cash or on account until 31th December 2020 (including this date).
You may find the full text of the Decree here.