Turkey: Renewal of Certificates of Tax Residence – amended deadline
Clearstream Banking1 informs customers that effective
1 January 2018
a new deadline will be applicable, when providing or renewing the Certificate of Tax Residence.
The Certificate of Tax Residence is required on an annual basis, for both non-resident individuals and institutional beneficial owners, in order to benefit from a reduced Double Taxation Treaty (DTT) rate on Turkish cash dividend payments. The previous process allowed certain beneficial owners, for whom a Certificate of Tax Residence was submitted in the previous year, to have the validity extended to the first quarter of the following year, provided certain conditions where fulfilled.
To benefit from a reduced DTT rate on Turkish cash dividend payments in 2018, the Certificate of Tax Residence, duly completed and signed by the local tax authorities, must be received by Clearstream Banking, no later than 09:00 CET, 21 business days before the first dividend payment to which the Certificate of Tax Residence applies.
Form requirements of the Certificate of Tax Residence
Customers are reminded that the Certificate of Tax Residence must be issued by the beneficial owner's tax authorities and include the following information:
- The beneficial owner's full name, TIN, date of establishment (corporates) or date of birth (individuals) and registered address;
- A reference to article 4 (Residency) of the DTT or reference to the Double Taxation Convention between the country of residence of the beneficial owner and Turkey and may not contain phrases such as "exempt from tax" or "not liable to tax"; and
- The validity period (dd/mm/yyyy – dd/mm/yyyy)
NB: All issuers are requesting the Certificate of Tax Residence with clear validity period details. Therefore, if a local tax authority does not issue a Certificate of Tax Residence with the above format, then the certificate must as a minimum state “for the year YYYY”.
A validity period dated in 2017 will not be accepted for payments in 2018.
It must be dated in the same year that the dividend is paid but before the first relevant dividend payment date in 2018.
The Certificate of Tax Residence must be provided to Clearstream Banking in original. It will be translated by a translation agency appointed by Clearstream's local depository and then notarised in Turkey by a notary appointed by Clearstream's local depository. The translation agency offers translation facilities in several languages. However, additional translation costs may apply and the process may take longer if the documents are provided in a language other than English.
Impact on customers
Customers are strongly recommended to start the renewal procedure, as early as possible in 2018, in order to meet the above deadline.
For further information, please contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or your Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.