Tax Treaty Case Law around the Globe 2020

S. 273Chapter 23 Turkey: Taxation Rights over Independent Personal Services – Procedural Rules for Taxation at Source

Cihat Öner

23.1. Introduction

Turkey has multi-faceted relations with Germany, including political, economic, military and human dimensions with a long-standing background. This interconnection also covers high-level mutual visits, as well as contacts at technical levels. In line with this, the case at hand is related to the taxation of independent personal services in the first instance. However, before going into the case’s specifics, it is necessary to shed some light on the background of the tax treaty relations between Turkey and Germany.

Despite the existence of model tax treaties, it is well known that the negotiation of tax treaties is influenced by national tax treaty policies and the legal traditions of the contracting states involved. In Turkey and Germany, taxpayers have suffered from uncertainty concerning the future direction of the tax treaty policy for many years due to non-transparent internal discussions held at the Ministry of Finance and/or at the Revenue Administrations. Taxpayers have been soliciting standardized formulations and guidance on the treaty p...