The income tax treaty between Burundi and Turkey was signed on 10 March 2022. The treaty is the first of its kind between the two countries.

Taxes Covered

The treaty covers Burundian income tax chargeable in accordance with the provisions of the Income Tax Act and covers Turkish income tax and corporate tax.

Withholding Tax Rates

• Dividends - 5% if the beneficial owner is a company directly holding at least 25% of the paying company's capital; otherwise, 15%
• Interest - 10%, with an exemption for interest paid to the government or Central Bank of a Contracting State
• Royalties - 10%

Capital Gains

The following capital gains derived by a resident of one Contracting State may be taxed by the other State:

• Gains from the alienation of immovable property situated in the other State; and
• Gains from the alienation of movable property forming part of the business property of a permanent establishment in the other State.

Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.

Double Taxation Relief

Both countries apply the credit method for the elimination of double taxation.

Entitlement to Benefits

Article 28 (Entitlement to Benefits) provides that a benefit under the treaty shall not be granted in respect of an item of income if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of the treaty.

Entry into Force and Effect

The treaty will enter into force once the ratification instruments are exchanged and will apply from 1 January of the year following its entry into force.