Information Exchange Under Turkish Tax Law

July 2016
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The effects of globalization and increased capital mobilization have forced most states to take extreme measures when tracing international transactions of taxpayers in order to combat base erosion and harmful tax competition. The differing tax ratios applied by states as a result of their tax policies made it possible for certain taxpayers to conclude their transactions with significantly lower tax burdens. In the aftermath of the economic crisis of 2008, the states all around to world were incentivized to cooperate in order to take measures to prevent wealthy individuals and entities to park their capital to tax havens in order to evade paying tax. More recently, the Panama Papers[1], a massive amount of confidential documents leaked on April 2016, attracted global attention to tax secrecy and tax havens.

In order to ensure the exchange of tax-related information, the states either amend their domestic tax law or conclude bilateral or multilateral treaties, such as tax information exchange agreements. Below, the tax information exchange structure provided under Turkish legislation, both of domestic and international natures, are summarized and explained.

Regulations under the Tax Procedural Code

The gathering of tax information under Turkish Law is regulated under Art(s). 148, 152 and 152/A of the Tax Procedural Code numbered 213 (“TPC”). In accordance with Art. 148, public administration and institutions, taxpayers and the individuals or entities dealing with the taxpayers shall provide the information that might be required by the Ministry of Finance (“Ministry”). Such information may be requested orally or in writing. Art. 152 regulates the confidentiality of the information gathered. Further, Art. 152/A entitled, “Exchange of information as per the international treaties,” was added to the TPC in 2013, in order to authorize the Ministry in matters of international tax information exchange. The said provision reads:

“Article 152/A – Ministry of Finance Revenue Administration or others authorized to carry out tax examinations shall collect information, within the scope of tax information exchange provisions of international agreements duly entered into force, in accordance with the procedures set forth by the Ministry of Finance and not restricted to the scope identified within Art. 1 of this Code.”

This provision was the first in our legislation as a domestic regulation that regulates the international information exchange. However, the implementation of the TPC Art. 152/A is only possible in the presence of international agreements duly entered into force.

Tax Information Exchange under the OECD Structure

In order to promote the implementation of transparency and exchange of information for tax purposes, the Organization for Economic Co-operation and Development (“OECD”) has been active through the Global Forum on Transparency and Exchange of Information for Tax Purposes (“Global Forum”) since 2000. The Global Forum is a multilateral framework within which work on transparency and exchange of information for tax purposes has been carried out by both OECD and non-OECD economies. Since its restructuring in 2009, the Global Forum has become the key international body working on the implementation of the international standards on tax transparency.

The Global Forum utilizes two methods to ensure standardization of tax information exchange, which are peer review and monitoring systems. In this vein, the Global Forum audits the States Parties in one or two level steps, and presents country reports regarding the states and regions for voting. Unless the state in question is not transparent or willing to exchange information, the reports of such country shall not be approved. Further, if a given country is deemed insufficient with regards to tax information exchange, they are classified as states that exercise harmful tax competition[2].

As of July, 2016, 135 countries are States Parties, together with 15 international organizations participating as observers to the Global Forum, including Turkey.

In addition to the Global Forum, the Convention on Mutual Administrative Assistance in Tax Matters (“Convention”) was developed, jointly, by the OECD and the Council of Europe in 1988, and amended by a Protocol in 2010. Although Turkey signed the Convention on 03.11.2011, it has not yet been ratified. Once the Convention is duly ratified and entered into force, it will enable Turkey to exchange tax-related information even with the countries it has not concluded tax information exchange agreement with[3].

Further, the OECD also has a Model Tax Convention on Income and Capital (“Model Convention”) that aims to provide a model for the prevention of double taxation agreements to be concluded between countries[4]. The aims of the Model Convention may be summarized as clarifying and standardizing the fiscal situation of taxpayers who are engaged in activities in other countries, as well as the prevention double taxation. Within this context, Art. 26 of the Model Convention entitled, “Exchange of Information,” allows the competent authorities of States Parties to exchange information.

Information Exchange within the Scope of Bilateral Agreements

The Prevention of Double Taxation Agreements

The first appearance of any regulation that aims to facilitate the tax information exchange between countries is through the prevention of double taxation agreements (“PDTAs”). Although in time, the provisions regarding information exchange included in the PDTAs proved insufficient in the face of increased capital mobility, the PDTAs are still one of the most utilized tools to combat harmful tax competition and tax evasion. The exchange of information with regard to PDTAs is restricted to the income and capital falling within the scope of that PDTAs. Other issues with regard to the use of the information gathered, as well as confidentiality, are also regulated.

In July, 2016, Turkey signed and ratified PDTAs with 82 states[5].

Tax Information Exchange Agreements

Although Turkey concluded an extensive number of PDTAs, there may be instances where execution of tax information exchange agreements (“TIEAs”) are preferred, and are also promoted by the Global Forum. Also as explained, above, the PDTAs are not deemed sufficient in order to ensure information exchange and cooperation with regard to tax havens. Therefore, TIEAs that concentrate on a more specific matter of information exchange are employed to ensure maximum transparency.

Such agreements may be concluded multilaterally, however, they are executed bilaterally in practice[6]. TIEAs aim to provide information to tax authorities regarding their taxpayers’ investments in a tax haven or in offshore investments made through such tax havens.

As of July, 2016, Turkey has ratified TIEAs with two states, namely, Jersey and Bermuda. Although TIEAs have also been signed with Gibraltar, Guernsey and the Isle of Man, they are not yet in force.

FATCA Agreement

The Agreement between the Government of the United States of America (“USA”) and the Government of the Republic of Turkey to Improve International Tax Compliance through Enhanced Exchange of Information (“FATCA[7] Agreement”) was signed on 29.07.2015 based on the exchange of information provision of the PDTA entered into force between the USA and Turkey. The FATCA Agreement entered into force by the Law numbered 6677, published on the Official Gazette dated 16.03.2016 and numbered 29655.

The FATCA is a US regime aimed at US taxpayers with offshore accounts and investments. To avoid withholding taxes on certain US-connected investments, specified types of non-US entities, such as financial institutions, must disclose to the US Internal Revenue Service (“IRS”) information about their US accounts and the holders of such accounts[8]. The scope of the FATCA Agreement differs from other TIEAs since it only foresees the automatic exchange of solely the US taxpayers with offshore accounts and investments. Further, the FATCA Agreement introduces novel reporting obligations and procedural rules that differentiate it from other exchanges of information systems.


Under Turkish legislation, exchange of tax-related information is regulated under norms, which are both domestic and international in character. The TPC provides for the exchange of information as provided by the international agreements duly entered into force. As for the international agreements, there are multilateral and bilateral agreements that are currently in force, or are expected to be ratified. The OECD is a leading force in the prevention of tax secrecy and ensuring transparency, with multiple model conventions, and forums and treaties dedicated thereto. Although Turkey has not yet ratified the Convention, it is an active member of the Global Forum. As for bilateral treaties, Turkey is a State Party to a considerable number of PDTAs; however, it concluded TIEAs, which are deemed more effective in preventing tax secrecy, with only two states.

[1] For further information please see:>

[2] Timur Çakmak, Otomatik Bilgi Değişim Anlaşmalarının Ulusal Vergi Hukukuna Yansımaları,, p. 2.

[3] Çakmak, p. 4.

[4] For the full text, please see:

[5] For the full list, please see:

[6] Leyla Ateş, Vergisel Bilgilerin Otomatik Değişimi Standardı ve Türkiye, İnönü Üniversitesi Hukuk Fakültesi Dergisi Özel Sayı Volume:2, 2015, p. 671.

7] FATCA stands for “Foreign Accounts Tax Compliance Act”, a legislation enacted in the USA on 18.03.2010 which aims to achieve cooperation with the financial instiutions residing outside US to detect the US -taxpayers’ income deposited in off-shore accounts.

[8] KPMG, Automatic Exchange of Information,, p. 9.

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