Taxation of Foreign and Turkish Stock Market Gains and Dividends for Foreign Residents in Türkiye

Investing in stock markets has become increasingly popular among both Turkish citizens and foreign residents living in Türkiye. With a sharp decline in interest toward foreign currency savings, growing mistrust in crypto assets, and decreasing interest rates, many foreigners have turned to equity markets, particularly Borsa Istanbul (BIST) and U.S. stock exchanges, as attractive alternatives.

But what are the tax implications for resident foreigners in Türkiye who earn dividends or capital gains from these investments? Can profits earned through U.S. or Turkish brokerage accounts be exempt from tax? This blog explains the legal obligations, exemptions, and practical steps under Turkish tax law.

Are Stock Market Profits and Dividends Taxable in Türkiye?

Yes, but the answer depends on where the stocks are traded.

1. Dividends and Capital Gains from Turkish Stocks (Borsa İstanbul – BIST)

If you invest in Turkish companies through Borsa İstanbul and earn:

• Capital Gains: These are exempt from income tax for individuals, provided you hold the stocks in a registered brokerage account.

• Dividends (Temettü): These are subject to a 10 percent withholding tax at the source. This means the tax is automatically deducted, and you usually do not need to file an annual income tax return unless your other income sources require it.

Resident foreigners in Türkiye are treated the same as Turkish citizens for these purposes. No additional filing is required beyond the source withholding for dividends.

2. Dividends and Capital Gains from Foreign Stocks (for example U.S. Markets)

Foreign stocks such as Apple, Google, or Tesla are treated differently:

• Dividendsfrom foreign stocks are classified as "menkul sermaye iradı" (investment income) under Article 75 of the Turkish Income Tax Law. If your total foreign dividends exceed 13,000 TL (for 2025), you must file an annual income tax return in Türkiye.

  Unlike dividends from Turkish companies, foreign dividends are not subject to withholding tax in Türkiye, and the 50 percent exemption under Article 22 does not apply.

• Capital Gainsfrom selling foreign stocks through platforms such as Interactive Brokers or eToro are considered "değer artış kazancı" (capital gains). These must be declared in Türkiye if:

  • You are a tax resident of Türkiye (for example if you stay over six months per year in the country), and

  • You either transfer the money to Türkiye or otherwise gain access to it.

You must calculate the gain in Turkish Lira using the Central Bank’s exchange rates on the purchase and sale dates. Inflation adjustment to the cost basis is allowed if the annual producer price index exceeds 10 percent.

3. Voluntary Disclosure of Past Foreign Income

If you failed to declare capital gains or dividends from previous years, you may benefit from a voluntary declaration to the Turkish tax office before any audit begins. This can significantly reduce penalties or even waive them entirely.

Key Legal Reminders for Resident Foreigners in Türkiye

• If you reside in Türkiye for more than six months per year, you are considered a full tax resident and must declare your worldwide income, including dividends or gains from foreign stock markets.

• You are not exempt just because your investments are made through U.S. or European brokerage firms. The Turkish tax authority has full jurisdiction over your global income.

• Income earned abroad but accessed or used in Türkiye, such as by transferring funds to a Turkish account, is considered acquired in Türkiye and becomes subject to Turkish tax law.

How Bayraktar Attorneys Can Assist You

At Bayraktar Attorneys, we work with resident foreign clients from the United States, Europe, and the Middle East who invest in both Turkish and foreign stock markets. Our services include:

• Determining your Turkish tax residency status

• Preparing and filing income tax returns

• Advising on inflation-indexed gain calculations

• Supporting voluntary disclosures for unreported past income

• Liaising with Turkish tax authorities on your behalf

• Clarifying whether your investment platform qualifies for exemptions

We ensure that you are compliant with Turkish tax law while also protecting your financial interests and minimizing unnecessary tax exposure.

Whether you are a digital nomad investing in ETFs, a retiree trading U.S. stocks, or an entrepreneur with both Turkish and foreign portfolios, we are ready to assist you.