Turkey (tax/treaty)

Termination 1. This Convention shall remain in force indefinitely but either of the Contracting States may terminate the Convention through the diplomatic channel, by giving to the other Contracting State written notice of termination not later than 30 June of any calendar year starting five years after the year in which the Convention entered into force. 2. In such event the Convention shall cease to apply: (a) with regard to taxes withheld at source, in respect of amounts paid after the end of the calendar year in which such notice is given; and (b) with regard to other taxes, in respect of taxable years beginning after the end of the calendar year in which such notice is given. In witness whereof the undersigned, being duly authorized thereto, have signed this Convention. Done in duplicate at Ankara on 9 November 2007 Corresponding to 28/10/1428h in the Arabic, Turkish and English languages, all texts being equally authentic. In case of divergence of interpretation, the English text shall prevail. For the Government of For the Government the Kingdom of Saudi Arabia the Republic of Turk Ibrahim A. Al-Assaf Ali Babacan Minister of Finance Minister of Foreign PROTOCOL At the moment of the signing of the Convention between the Government of the Kingdom of Saudi Arabia and the Government of the Republic of Turkey for the Avoidance of Double Taxation and the Prevention of Tax Evasion with respect to Taxes on Income, the undersigned have agreed upon the following provisions which shall constitute an integral part of the Convention. 1. With respect to paragraph 1 of Article 4 It is understood that, the term resident also includes a legal person organized under the laws of a Contracting State and that is generally exempt from tax in that State and is established and maintained in that State either: i. Exclusively for a religious, charitable, educational, scientific, or other similar purpose; or ii. To provide pensions or other similar benefits to employees pursuant to a plan. 2. With respect to paragraph 3 of Article 4 In the case of dual residency, where a person other than an individual has its place of effective management in one of the States and its legal head office in the other State, then the competent authorities of the Contracting States shall consult by mutual agreement to determine whether the legal head office of such a person has to be considered as the actual place of effective management or not. 3. With respect to paragraph 2 of Article 6 It is understood that, the term "immovable property" shall in any case include livestock and equipment used in breeding and cultivation of fish. 4. With respect to Article 7 a. In the case of contracts for constructions or installations or any survey related to construction or installation, the profits of a permanent establishment shall not be determined on the total amount of the contract, but shall be determined only on the basis of that part of the contract, which is effectively carried out by the permanent establishment in the state where the permanent establishment is situated and any portion of the contract executed outside the other Contracting State shall not be taken into consideration in determining the profits of the permanent establishment. b. It is understood that, business profits derived by an enterprise of a Contracting State from the exportation of merchandise to the other Contracting State shall not be taxed in that other Contracting State. Where export contracts include other activities carried on through a permanent establishment in the other Contracting State, profits attributable to such activities may be taxed in the other Contracting State. c. It is understood that, the term "business profits" includes, but is not limited to income derived from manufacturing, mercantile, banking, insurance, from the operation of inland transportation, the furnishing of services. Such a term does not include the performance of personal services by an individual either as an employee or in an independent capacity. 5. With respect to Article 10 Notwithstanding any provision of this Convention, profits of a company of a Contracting State carrying on business in the other Contracting State through a permanent establishment situated therein may, after having been taxed under Article 7, be taxed on the remaining amount in the Contracting State in which the permanent establishment is situated and the tax so charged shall not exceed 5 per cent. 6. With respect to paragraph 2 of Article 24 It is understood that, the taxpayer must claim the refund resulting from such mutual agreement within a period mentioned in the domestic laws of the Contracting States after the tax administration has notified the taxpayer of the result of the mutual agreement. 7. It is understood that, nothing contained in this Convention shall affect the rights and obligations of the Contracting States under the agreement between the Kingdom of Saudi Arabia and the Republic of Turkey for Reciprocal Exemption of Taxes on the Activities of Air Transport Enterprises of the Two Contracting States signed on the 11th January 1989 . 8. In the case in which Saudi Arabia will introduce an income tax applicable to its nationals who are residents of Saudi Arabia, or the existing tax will be modified accordingly, then the two Contracting States shall enter into negotiations in order to introduce in the Convention an article on non-discrimination. In witness whereof the undersigned, being duly authorized thereto, have signed this Protocol. Done in duplicate at Ankara on 9 November 2007 Corresponding to 28/10/1428h in the Arabic, Turkish and English languages, all texts being equally authentic. In case of divergence of interpretation, the English text shall prevail.