GERMANY and Turkey have signed a new bilateral agreement between the
two countries aimed at the avoidance of double taxation in the area of taxes on
income.
According to the German finance ministry, the new DTAA, based on the OECD
model, wil enter into effect retroactively from January 1, 2011, following an
exchange of the relevant ratification documents. The new DTAA is to replace the
existing agreement between the two countries dating back to 1985. Elaborating the key changes
to the existing agreement, the German finance ministry has stated that the new
DTA provides for a reduction in the withholding tax rates levied on dividends
and interest, and introduces a limited right to tax pensions in the source
country.
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