Ruling Number: B.07.1.GİB.4.34.16.01-KVK 23-1365 Introduction In a private ruling dated April 14, 2012, the Istanbul Tax Office (Taxpayer Services Income Taxes Group Directorate) addressed whether profits derived from international aircraft operations by the Türkiye Istanbul branch of a company are taxable in Türkiye. The taxpayer stated that they operate as the Türkiye Istanbul branch of a company (the identity of the parent company is redacted in the published ruling). They requested clarification on whether profits earned from international aircraft operations are subject to taxation in Türkiye. Legal Framework Corporate Tax Law (Law No. 5520) – Article 3 – Full and Limited Liability: Concept Definition Tax Liability Full Liability Corporations whose legal or business center is located in Türkiye Taxed on worldwide income Limited Liability Corporations whose legal and business centers are both not located in Türkiye Taxed only on income derived from Türkiye Legal Center The center shown in the incorporation laws, bylaws, articles of association, or contracts of the corporation – Business Center The center where business transactions are actually conducted and managed – Double Taxation Treaty Provisions Türkiye-Algeria Double Taxation Treaty (Effective January 1, 1997) Article 8 – International Shipping and Air Transport: 1. Profits derived by an enterprise of one Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the legal center of the enterprise is located.   Ruling Conclusion Key Principle: Under Article 8 of the Türkiye-Algeria DTT, profits derived from international aircraft operations are taxable exclusively in the country where the enterprise’s legal center is located. Application to the Case: Since the branch in question is a branch of a company whose legal center is located in Algeria, the profits derived by the branch from international aircraft operations shall be taxable only in Algeria. Therefore, no taxation in Türkiye applies to such profits.   Required Documentation for Treaty Benefits To benefit from the treaty provisions, the taxpayer must: Obtain a Certificate of Residency from the competent Algerian authorities. Provide the original certificate along with a notarized or Turkish Consulate-certified Turkish translation to the relevant tax office.   Summary Table Factor Determination Legal center of the enterprise Algeria Type of income Profits from international aircraft operations Treaty article Article 8 – International traffic Taxable in Algeria? Yes (exclusive taxing right) Taxable in Türkiye? No Condition for treaty application Certificate of Residency + certified Turkish translation Important Notes This private ruling is based on Article 413 of the Tax Procedure Law No. 213. The ruling becomes invalid if incorrect information is provided, or if there is ongoing tax audit, litigation, or reconciliation related to this matter. Acting in accordance with this ruling protects the taxpayer from tax penalties and default interest for the related transactions. Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.