What are the main advantages?

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We recommend Turkish shareholders with foreign portfolio investments, especially those holding these investments in Switzerland, to consider the option of holding the ownership of these investments in a Swiss company.



a) In Switzerland, profits are taxed at a rate between 11.9% and 14%; in Turkey, a 25% corporate tax or a 40% individual income tax (marginal tax rate) applies.

b) The amount of information that needs to be provided to Turkey under the General netherlands mobile database Reporting Standard (CRS) regulations will decrease.

c) There is a double tax agreement between Türkiye and Switzerland in force since January 1, 2013.

Turkish Controlled Foreign Company (CFC) Legislation and Swiss Corporate Tax

As explained above, Swiss companies offer an attractive opportunity with corporate tax rates ranging from 11.9% to 14% (depending on which canton of Switzerland they are located in). This is a significant advantage as under the CFC rules in Turkey, foreign branches cannot pay undistributed income when the foreign company’s corporate tax is above 10%.

Fluctuations in the Currency of Investment

When investments are owned by individual and corporate taxpayers in Turkey, fluctuations in the Turkish Lira against major currencies may trigger taxable foreign exchange gains. In Turkey, fluctuations in the currency in which the investment is made are taxed even if they do not result in a real gain. Swiss companies do not pay tax on fluctuations in the currency in which they invest unless they result in a real gain.