International tax laws could be complicated for an individual who lives or does business across borders. The U.S.-Turkey Tax Treaty is a mutual agreement that is designed to prevent both parties from being taxed on the same income and to promote close trading relations between the two countries. The Finance Zoom is the best business management USA and ground-level accounting firm, and we recognize all the benefits to individuals who are closely linked to such pacts. For you, either a cross-border tax accountant or one of our professional expat tax accountants, or even for those who need advice, whether you need to pay personal tax according to the US-Turkey Tax Treaty I am here to guide you.

Understanding Residency and Tax Obligations

The Treaty stipulates that individuals are residents of a country where they have a permanent home at their disposal. However, if a person holds a home at their disposal in both states, their residency would depend on the center of their vital interests, such as family, economic activities, and others. Residents of both the US and Turkey should define their residency, as it affects the taxation they have to pay.

As a general rule, it is up to the country of residence to tax an individual’s worldwide income. Nonetheless, with reference to specific types of income, the resident country could have the right to levy a tax, although at a reduced rate, on the source country. In many cases, a resident of one country who earns income in another country may receive a foreign tax credit on its resident income earned in the source country.

Avoiding Double Taxation: Income and Deductions