The Government of the United States of America and the Government of the Republic of Turkey, desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, have agreed as follows:

ARTICLE 1: Personal Scope

1. This Agreement shall apply to persons who are residents of one or both of the Contracting States, except as otherwise provided in the Agreement.

2. The Agreement shall not restrict in any manner, any exclusion, exemption, deduction, credit, or other allowance now or hereafter accorded: a) by the laws of either Contracting State; or b) by any other agreement between the Contracting States.

3. Notwithstanding any provision of the Agreement except paragraph 4, a Contracting State may tax its residents (as determined under Article 4 (Resident)), and, in the case of the United States, by reason of citizenship may tax its citizens, as if the Agreement had not come into effect. For this purpose, the term “citizen” shall include a former citizen whose loss of citizenship had as one of its principal purposes the avoidance of tax, but only for a period of 10 years following such loss.

4. The provisions of paragraph 3 shall not affect: a) the benefits conferred by a Contracting State under paragraph 2 of Article 9 (Associated Enterprises), under paragraph 2 of Article 18 (Pensions and Annuities), and under Article 23 (Relief from Double Taxation), 24 (Non-Discrimination), and 25 (Mutual Agreement Procedure); and b) the benefits conferred by a Contracting State under Articles 19 (Government Service), 20 (Students, Apprentices, and Teachers), and 27 (Members of Diplomatic Missions and Consular Posts), upon individuals who are neither citizens of, nor have immigrant status in, that State.

5. Notwithstanding the provisions of subparagraph 2(b): a) Notwithstanding any other agreement to which the Contracting States may be parties, a dispute concerning whether a measure is within the scope of this Agreement shall be considered only by the competent authorities of the Contracting States, as defined in subparagraph 1(h) of Article 3 (General Definitions) of this Agreement, and the procedures under this Agreement exclusively shall apply to the dispute. b) Unless the competent authorities determine that a taxation measure is not within the scope of this Agreement, the nondiscrimination obligations of this Agreement exclusively shall apply with respect to that measure, except for such national treatment or most-favored-nation obligations as may apply to trade in goods under the General Agreement on Tariffs and Trade. No national treatment or most-favored-nation obligation under any other agreement shall apply with respect to that measure. c) For the purpose of this paragraph, a “measure” is a law, regulation, rule, procedure, decision, administrative action, or any other form of measure.

ARTICLE 2: Taxes Covered

1. This Agreement shall apply to taxes on income imposed on behalf of each Contracting State, irrespective of the manner in which they are levied.

2. The existing taxes to which the Agreement shall apply are, in particular: a) in the case of Turkey: i) the income tax (Gelir Vergisi); ii) the corporation tax (Kurumlar Vergisi); iii) the levy imposed on the income tax and the corporation tax (hereinafter referred to as “Turkish Tax”); b) in the case of the United States: the Federal income taxes imposed by the Internal Revenue Code (but excluding the accumulated earnings tax, the personal holding company tax and social security taxes), and the excise taxes imposed with respect to private foundations (hereinafter referred to as “United States Tax”).

3. The Agreement shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes which have been made in their respective taxation laws.

ARTICLE 3: General Definitions

For the purposes of this Agreement, unless the context otherwise requires:

a) (i) the term “Turkey” means the territory of the Republic of Turkey, as well as the continental shelf over which Turkey has, in accordance with international law, sovereign rights to explore and exploit its natural resources;

(ii) the term “United States” means the United States of America, but does not include Puerto Rico, Virgin Islands, Guam or any other United States possession or territory. When used in a geographic sense it means the states thereof, the District of Columbia, and the internal waters and territorial sea of the United States, established in accordance with international law; it also includes the seas, seabed, and subsoil adjacent to the territorial sea in which the United States has or exercises sovereign rights or jurisdiction in accordance with international law;

b) the terms “a Contracting State” and “the other Contracting State” mean Turkey or the United States as the context requires;

c) the term “person” includes an individual, a company, and any other body of persons;

d) the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;

e) a company has its “place of incorporation”:

(i) in Turkey, if its legal head office is registered in Turkey under the Turkish Code of Commerce; or

(ii) in the United States, if it is organized, created, or incorporated under the laws of the United States or any political subdivision thereof;

f) the term “national” means:

(i) in relation to Turkey, any individual possessing Turkish nationality in accordance with the Turkish Nationality Code; and any legal person, partnership, or association deriving its status as such from the law in force in Turkey;

(ii) in relation to the United States, any individual who is a citizen of the United States; and any company, association, or other entity deriving its status as such from the laws of the United States or any political subdivision thereof;

g) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;

h) the term “competent authority” means:

(i) in the case of Turkey, the Minister of Finance or his authorized representatives;

(ii) in the case of the United States, the Secretary of the Treasury or his delegate;

i) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except where such transport is solely between places in the other Contracting State.

As regards the application of this Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, or the competent authorities agree to a common meaning pursuant to the provisions of Article 25 (Mutual Agreement Procedure), have the meaning which it has under the laws of that State concerning the taxes to which the Agreement applies.

ARTICLE 4: Resident

1. For the purposes of this Agreement, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management, place of incorporation, or any other criterion of a similar nature, provided, however, that in the case of income derived or paid by a partnership or similar pass-through entity, estate, or trust, this term applies only to the extent that the income derived by such partnership, similar entity, estate, or trust is subject to tax in that State as the income of a resident, either in its hands or in the hands of its partners, beneficiaries, members, or grantors. The term does not include any person who is liable to tax in that State only on income from sources in that State.

2. Where by reason of the provisions of paragraph 1, an individual is a resident of both Contracting States, then his status shall be determined as follows:

   a) He shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests);

   b) If the State in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode;

   c) If he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national;

   d) If he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

3. Where by reason of the provisions of paragraph 1 a company is a resident of both Contracting States, it shall be deemed to be a resident of the State in which it has its place of incorporation.

4. Where by reason of the provisions of paragraph 1 a person other than an individual or a company is a resident of both Contracting States, the competent authorities of the Contracting States shall settle the question by mutual agreement and determine the mode of application of the Agreement to such person.

ARTICLE 5: Permanent Establishment

1. For the purposes of this Agreement, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

2. The term “permanent establishment” includes especially: a) a place of management; b) a branch; c) an office; d) a factory; e) a workshop; f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; and g) a building site, a construction, assembly or installation project if such site, project, or activities continue for a period of more than six months.

3. Notwithstanding the preceding provisions of this Article, the term “permanent establishment” shall be deemed not to include: a) the use of facilities solely for the purpose of storage, display, or delivery of goods or merchandise belonging to the enterprise; b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise; e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character; f) the maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs a) through e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

4. Notwithstanding the provisions of paragraphs 1 and 2, where a person (other than an agent of an independent status to whom paragraph 5 applies) is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned State in respect of any activities which that person undertakes for the enterprise, if such a person: a) has and habitually exercises in the first-mentioned State an authority to conclude contracts on behalf of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 3 which, if exercised through a fixed place of business, would not make that fixed place of business a permanent establishment under the provisions of that paragraph; or b) has no such authority, but habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise. The foregoing provisions of this subparagraph shall apply only if it is proved that in order to avoid taxation in the first-mentioned State, such person undertakes not only the regular delivery of the goods or merchandise, but also undertakes virtually all the activities connected with the sale of the goods or merchandise except for the actual conclusion of the sales-contract itself.

5. An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent, or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business.

6. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

ARTICLE 6: Income from Immovable Property (Real Property)

1. Income derived by a resident of a Contracting State from immovable property (real property) (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.

2. The term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, fishing places of every kind, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property, and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships, boats, and aircraft shall not be regarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.

ARTICLE 7: Business Profits

1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.

2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the business profits which it might be expected to make if it were a distinct and independent enterprise engaged in the same or similar activities under the same or similar conditions.

3. In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere.

4. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

5. For the purposes of this Agreement, the profits to be attributed to the permanent establishment shall include only the profits derived from the assets or activities of the permanent establishment.

6. Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.

ARTICLE 8: Shipping and Air Transport

1. Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.

2. For purposes of this Article, profits from the operation of ships or aircraft in international traffic include profits derived from the rental of ships or aircraft if such rental profits are incidental to other profits described in paragraph 1.

3. Profits of an enterprise of a Contracting State from the use, maintenance, or rental of containers (including trailers, barges, and related equipment for the transport of containers) used in international traffic shall be taxable only in that State.

4. The provisions of paragraphs 1 and 3 shall also apply to profits from participation in a pool, a joint business, or an international operating agency.

ARTICLE 9: Associated Enterprises

1. Where: a) an enterprise of a Contracting State participates directly or indirectly in the management, control, or capital of an enterprise of the other Contracting State, or b) the same persons participate directly or indirectly in the management, control, or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

2. Where a Contracting State includes in the profits of an enterprise of that State, and taxes accordingly, profits on which an enterprise of the other Contracting State has been charged to tax in that other State, and the profits so included are claimed by the first-mentioned State to be profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits, where that other State considers the adjustment justified. In determining such adjustment, due regard shall be paid to the other provisions of this Agreement and the competent authorities of the Contracting States shall if necessary consult each other.

ARTICLE 10: Dividends

1. Dividends paid by a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.

2. However, such dividends may also be taxed in the Contracting State of which the payor is resident, and according to the laws of that State. If the beneficial owner of the dividends is a resident of the other Contracting State, the tax charged shall not exceed: a) 15 percent of the gross amount of the dividends if the beneficial owner is a company which owns at least 10 percent of the voting stock of the company paying the dividends; b) 20 percent of the gross amount of the dividends in all other cases. Subparagraph b) applies to dividends paid by a United States person that is a Regulated Investment Company or by a Turkish person that is a Securities Investment Corporation or a Securities Investment Fund. Subparagraph a) does not apply to dividends paid by a United States person that is a Real Estate Investment Trust or a Turkish person that is a Real Estate Investment Corporation or a Real Estate Investment Fund, and subparagraph b) applies only if the dividend is beneficially owned by an individual holding a less than 10 percent interest in the Real Estate Investment Trust, Real Estate Investment Corporation, or Real Estate Investment Fund; otherwise, the rate of tax applicable under domestic law shall apply.

3. The term “dividend” includes income from shares, “jouissance” shares or rights, founders shares or other rights participating in profits, income from other corporate rights treated similarly under the laws of the State of the company making the distribution. It also includes income from arrangements that carry the right to participate in, or are determined by reference to, profits under the laws of the Contracting State where the income arises.

4. a) Profits attributable to a permanent establishment in Turkey, through which a US resident company carries on business, after being taxed under other provisions of this Agreement, may be taxed in Turkey according to its law. b) A Turkish resident corporation with a permanent establishment in the US, or subject to US tax on a net basis on income taxable under Article 6 (Income from Immovable Property) or Article 13 (Gains), may also be subject in the US to a tax on the portion of business profits attributable to the permanent establishment and income under Article 6 or Article 13, representing the dividend equivalent amount. Such taxes shall not exceed the rate specified in subparagraph a) of paragraph 2 of this Article.

5. The provisions of paragraphs 1 and 2 do not apply if the recipient of the dividends, a resident of one Contracting State, carries on business in the other Contracting State through a permanent establishment or performs independent personal services from a fixed base there. In such cases, Article 7 (Business Profits) or Article 14 (Independent Personal Services) applies.

6. Where a company resident in one Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on dividends paid by the company, except when paid to a resident of that other State or when the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or fixed base in that other State.

ARTICLE 11: Interest

1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such interest may also be taxed in the Contracting State in which it arises, according to its laws. If the beneficial owner of the interest is a resident of the other Contracting State, the tax charged shall not exceed: a) 15 percent of the gross amount of the interest, except for interest derived from loans by financial institutions like banks, savings institutions, or insurance companies, which shall not exceed 10 percent of the gross amount of such interest.

3. Notwithstanding paragraph 2: a) Interest arising in the United States and paid to the Government of Turkey or the Central Bank of Turkey is exempt from US tax. b) Interest arising in Turkey and paid to the Government of the United States or any Federal Reserve Bank is exempt from Turkish tax. c) Interest arising in a Contracting State on a loan guaranteed or insured by the Government of the other Contracting State is exempt from tax in the first-mentioned State. The competent authorities will determine the scope of this exemption.

4. The term “interest” includes income from debt-claims of all kinds, income characterized as income from money lent by the laws of the Contracting State where the income arises, and income from government securities, bonds, or debentures. It also includes premiums or prizes attached to such securities.

5. Paragraphs 1, 2, and 3 do not apply if the recipient of the interest, a resident of one Contracting State, carries on business in the other Contracting State through a permanent establishment or performs independent personal services from a fixed base there. In such cases, Article 7 (Business Profits) or Article 14 (Independent Personal Services) applies.

6. Interest is deemed to arise in a Contracting State when paid by that State, a political subdivision, local authority, or resident of that State. If the payer has a permanent establishment, fixed base, or business in a Contracting State, and the interest is borne by that establishment, base, or business, it is deemed to arise in that State.

7. If the amount of interest exceeds what would have been agreed upon in the absence of a special relationship between the payer and the beneficial owner, the provisions of this Article apply only to the agreed amount. The excess part remains taxable according to the laws of each Contracting State.

8. Paragraphs 2 and 3 do not apply to: a) Excess inclusion with respect to a residual interest in a US real estate mortgage investment conduit; or b) Contingent interest that does not qualify as portfolio interest under US law, and equivalent amounts under Turkish law. Such income may be taxed under the provisions of Article 10 (Dividends) as if it were a dividend.

ARTICLE 12: Royalties

1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such royalties may also be taxed by the Contracting State in which they arise, according to its laws. If the beneficial owner of the royalties is a resident of the other Contracting State, the tax charged shall not exceed: a) 10 percent of the gross amount of royalties for copyrights of literary, artistic, or scientific works, including royalties for motion pictures and works on film, tape, or other means of reproduction used in radio or television broadcasting. b) 5 percent of the gross amount of royalties for the use of, or the right to use, industrial, commercial, or scientific equipment.

3. The term “royalties” in this Article refers to payments received as consideration: a) for the use of, the right to use, or the sale (which is contingent on the productivity, use, or disposition) of copyrights of literary, artistic, or scientific works, including royalties for motion pictures and works on film, tape, or other means of reproduction used in radio or television broadcasting, any patent, trademark, design or model, plan, secret formula or process, or for information concerning industrial, commercial, or scientific experience. b) for the use of, or the right to use industrial, commercial, or scientific equipment.

4. Paragraphs 1 and 2 do not apply if the beneficial owner of the royalties, a resident of one Contracting State, carries on business in the other Contracting State where the royalties arise through a permanent establishment or performs independent personal services from a fixed base there. In such cases, Article 7 (Business Profits) or Article 14 (Independent Personal Services) applies.

5. Royalties are considered to arise in a Contracting State when paid by that State, a political subdivision, local authority, or resident of that State. If the payer has a permanent establishment or fixed base in a Contracting State and the liability to pay the royalties is connected to that establishment or base, the royalties are deemed to arise from sources within that Contracting State. If neither of these conditions applies and the royalties are paid for the use of, or the right to use, a right or property within a Contracting State, they are deemed to arise in that State.

6. If the amount of royalties exceeds what would have been agreed upon by the payer and the beneficial owner in the absence of a special relationship between them, the provisions of this Article apply only to the agreed amount. The excess part remains taxable according to the laws of each Contracting State, considering the other provisions of the Agreement.

ARTICLE 13: Gains

1. Gains realized by a resident of one Contracting State from the sale of: a) real property located in the other Contracting State, or b) an interest in a partnership, trust, or estate to the extent it relates to real property situated in the other Contracting State, may be taxed in that other State.

2. For the purposes of this Article, “real property situated in the other Contracting State” includes interests in U.S. real property or equivalent Turkish real property, real property as defined in Article 6 (Income from Immovable Property (Real Property)) situated in the other Contracting State, and interests in partnerships, trusts, or estates as referred to in paragraph 1(b).

3. Gains from the sale of movable property forming part of the business property of a permanent establishment that an enterprise of one Contracting State has in the other Contracting State, or movable property related to a fixed base used by a resident of a Contracting State in the other Contracting State for independent personal services, including gains from the sale of such a permanent establishment (alone or with the entire enterprise) or such a fixed base, may be taxed in that other State.

4. Gains from the sale of ships, aircraft, or containers used in international traffic, or movable property related to the operation of ships, aircraft, or containers, shall be taxable only in the Contracting State of which the seller is a resident.

5. Gains from the sale of any property other than that mentioned in the preceding paragraphs shall be taxable only in the State of which the seller is a resident. However, this provision shall not affect the right of either State to impose taxes under its own laws on gains derived by a resident of the other State from the sale of shares or bonds issued by a company that is a resident of the first-mentioned State (excluding shares and bonds quoted on an exchange of that State) if the sale is made to a resident of the first-mentioned State and if the period between acquisition and sale does not exceed one year.

ARTICLE 14: Independent Personal Services

1. Income derived by a resident of one of the Contracting States from professional services or other independent activities shall be taxable only in that State. However, such income may also be taxed in the other Contracting State if these services or activities are performed there and if: a) the resident has a fixed base regularly available to them in that other State for performing these services or activities; or b) the resident is present in that other State for the purpose of performing these services or activities for more than 183 days in any continuous period of 12 months. In such cases, only the income attributable to that fixed base or derived from services or activities performed during their presence in that other State shall be taxed in that other State.

2. Income derived by an enterprise of one of the Contracting States from professional services or other similar activities shall be taxable only in that State. However, such income may also be taxed in the other Contracting State if these services or activities are performed there and if: a) the enterprise has a permanent establishment in that other State through which these services or activities are performed; or b) the period or periods during which these services or activities are performed exceed 183 days in any continuous period of 12 months. In such cases, only the income attributable to that permanent establishment or to the services or activities performed in that other State shall be taxed in that other State. In either case, Turkey may impose a withholding tax on such income. However, the recipient of such income, having been subject to such tax, may choose to be taxed on a net basis with respect to such income in accordance with the provisions of Article 7 (Business Profits) of this Agreement, as if the income were attributable to a permanent establishment of the enterprise situated in that other State.

ARTICLE 15: Dependent Personal Services

1. Salaries, wages, and similar remuneration received by a resident of one Contracting State for employment shall be taxable only in that State, unless the employment is exercised in the other Contracting State. If the employment is exercised there, the remuneration derived may be taxed in that other State.

2. Notwithstanding paragraph 1, remuneration received by a resident of one Contracting State for employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if: a) the individual is present in the other State for a period or periods not exceeding 183 days in any continuous 12-month period; b) the remuneration is paid by or on behalf of an employer who is not a resident of the other State; and c) the remuneration is not borne by a permanent establishment or a fixed base that the employer has in the other State.

3. Despite the preceding provisions of this Article, remuneration received by a resident of one Contracting State for employment as a member of the regular complement of a ship or aircraft operated in international traffic by an enterprise of the other Contracting State may be taxed in that other Contracting State.

ARTICLE 16: Directors’ Fees

Directors’ fees and similar payments received by a resident of one Contracting State for services performed as a member of the board of directors of a company that is a resident of the other Contracting State may be taxed in that other State.

ARTICLE 17: Artistes and Athletes

1. Income earned by a resident of one Contracting State as an entertainer (such as a theatre, motion picture, radio, or television artiste), musician, or athlete from personal activities performed in the other Contracting State may be taxed in that other State, unless the gross receipts from such activities do not exceed $3,000 USD or its equivalent in Turkish lira for the taxable year concerned.

2. If income from such activities accrues not to the entertainer or athlete themselves but to another person, it may be taxed in the Contracting State where the activities are performed, unless the entertainer or athlete can demonstrate that neither they nor any related person benefited directly or indirectly from that person’s profits, including deferred remuneration, bonuses, fees, dividends, partnership distributions, or other distributions, under Articles 7 (Business Profits) and 14 (Independent Personal Services).

3. Paragraphs 1 and 2 do not apply to income derived from activities in a Contracting State by entertainers or athletes if those activities are significantly supported by a nonprofit organization of the other Contracting State or by public funds of the other Contracting State, a political subdivision, or a local authority thereof.

ARTICLE 18: Pensions and Annuities

1. Pensions and similar payments made to a resident of one Contracting State in consideration of past employment, whether paid periodically or as a lump-sum, shall be taxable only in that State.

2. Despite paragraph 1, payments made by a Contracting State under its social security or similar legislation to a resident of the other Contracting State or to a U.S. citizen shall be taxable only in the first-mentioned State.

3. Annuities received by an individual resident of a Contracting State shall be taxable only in that State. Annuities, in this context, refer to fixed sums paid periodically at set times over a specified number of years, obligated in return for full and adequate consideration (other than services rendered) in money or money’s worth.

ARTICLE 19: Government Service

1. a) Remuneration, excluding pensions, paid by a Contracting State, political subdivision, or local authority thereof, for services rendered to that State or subdivision/authority shall be taxed only in that State. b) However, such remuneration may be taxed in the other Contracting State if the services are performed there and the individual: (i) is a resident and national of that State; or (ii) did not become a resident of that State solely for the purpose of rendering the services.

2. a) Any pension paid by a Contracting State, political subdivision, or local authority thereof, for services rendered to that State or subdivision/authority shall be taxed only in that State. b) However, such pension may be taxed in the other Contracting State if the individual is a resident and national of that State.

3. The provisions of Articles 15 (Dependent Personal Services), 16 (Directors’ Fees), and 18 (Pensions and Annuities) apply to remuneration and pensions for services rendered in connection with a business conducted by a Contracting State, political subdivision, or local authority thereof.

ARTICLE 20: Students, Apprentices, and Teachers

1. Payments received by a student, apprentice, or business trainee who is or was immediately before visiting a Contracting State a resident of the other Contracting State, for maintenance, education, or training purposes while present in the first-mentioned State for full-time education or training, shall not be taxed in that State, provided these payments originate outside that State.

2. Similarly, remuneration received by a teacher or instructor who is or was immediately before visiting a Contracting State a resident of the other Contracting State, and who is present in the first-mentioned State for up to two years for teaching or engaging in scientific research, shall be exempt from tax in that State on the remuneration received for personal services related to teaching or research, provided these payments arise outside that State.

ARTICLE 21: Other Income

1. Income of a resident of a Contracting State, not covered by the preceding Articles of this Agreement, shall be taxable only in that State, regardless of where it arises.

2. Paragraph 1 does not apply to income, excluding income from immovable property as defined in Article 6 (Income from Immovable Property (Real Property)), if the beneficial owner, a resident of a Contracting State, conducts business in the other Contracting State through a permanent establishment or performs independent personal services from a fixed base in that other State, and the income is attributable to such permanent establishment or fixed base. In such cases, Article 7 (Business Profits) or Article 14 (Independent Personal Services), as applicable, shall apply.

ARTICLE 22: Limitation on Benefits

1. A person (other than an individual) who is a resident of a Contracting State and earns income from the other Contracting State shall not be entitled to tax relief in that other State under this Agreement unless: a) More than 50 percent of the beneficial interest in such person (or, in the case of a company, more than 50 percent of the number of shares of each class of the company’s shares) is owned, directly or indirectly, by one or more individual residents of one of the Contracting States or citizens of the United States, or by persons eligible for benefits under paragraphs 3, 4, or 5; and b) The income of such person is not primarily used to meet obligations (including interest or royalties) to persons who are neither residents of one of the Contracting States nor citizens of the United States, nor eligible for benefits under paragraphs 3, 4, or 5.

2. Paragraph 1 does not apply if the income derived from the other Contracting State is related to, or incidental to, active business operations conducted by such person in the first-mentioned Contracting State (except for financial investment activities, unless they are banking or insurance activities conducted by a bank or insurance company), and, in the case of income related to active business operations, the business is substantial relative to the activities conducted in the other Contracting State that generate the income for which treaty benefits are sought in that other Contracting State.

3. Paragraph 1 does not apply if the person earning the income: a) Is a company resident in a Contracting State whose main class of shares is regularly traded on a recognized stock exchange; or b) Is wholly owned, directly or indirectly, by a company referred to in subparagraph (a), provided that each company in the ownership chain meets the residency requirement of a Contracting State.

4. Paragraph 1 does not apply to a Contracting State, political subdivision thereof, or local authority thereof.

5. Paragraph 1 does not apply if the income earned from the other Contracting State is earned by a nonprofit organization that, due to its status, is generally exempt from income taxation in its Contracting State of residence, provided that: a) More than half of its annual support is used for the benefit of eligible persons; or b) More than half of its annual support is received from eligible persons. “Eligible person” means: a) A person (including an individual) eligible for benefits under paragraph 1, 3, 4, or 5 of this Article; or b) A citizen of the United States.

6. A person not otherwise entitled to benefits under this Agreement under other provisions of this Article may still be granted benefits under this Agreement if the competent authority of the Contracting State where the income in question arises so decides.

ARTICLE 23: Relief from Double Taxation

1. Pursuant to the United States law, subject to any limitations and amendments thereof, the United States shall allow its residents or citizens a credit against United States tax on income for: a) Taxes paid to Turkey on income by or on behalf of such citizen or resident; and b) In the case of a United States company owning at least 10 percent of the voting stock of a Turkish company from which it receives dividends, taxes paid to Turkey by or on behalf of the distributing company on the profits out of which the dividends are paid. For this purpose, the taxes referred to in subparagraph (a) of paragraph 2 and paragraph 3 of Article 2 (Taxes Covered) shall be considered income taxes.

2. If a resident of Turkey earns income that may be taxed both in the United States and Turkey according to this Agreement, Turkey shall allow, subject to its laws on credit for foreign taxes, a deduction from the tax on the income of that person in an amount equal to the income tax paid in the United States. However, this deduction cannot exceed the part of the income tax calculated in Turkey before the deduction, which corresponds to the income subject to taxation in the United States.

3. For the purpose of providing relief from double taxation under this Article, and subject to the source rules in the domestic laws of the Contracting State that apply to limit the foreign tax credit, income earned by a resident of a Contracting State that may be taxed in the other Contracting State according to this Agreement (except solely because of citizenship as per paragraph 3 of Article 1 (Personal Scope)) shall be deemed to arise in that other State. These rules do not apply to credits against United States tax for foreign taxes other than those referred to in subparagraph (a) of paragraph 2 and paragraph 3 of Article 2 (Taxes Covered).

ARTICLE 24: Non-Discrimination

1. Nationals of one Contracting State shall not be subjected in the other Contracting State to any taxation or requirements related to taxation that are different or more burdensome than those imposed on nationals of that other State in the same circumstances, especially concerning residency.

2. The taxation imposed on a permanent establishment of an enterprise from one Contracting State in the other Contracting State shall not be less favorable than the taxation imposed on enterprises of the latter State engaged in similar activities.

3. Except where specific provisions of Articles 9 (Associated Enterprises), 11 (Interest), or 12 (Royalties) apply, interest, royalties, and other payments made by a resident of one Contracting State to a resident of the other Contracting State shall be deductible under the same conditions as if they were paid to a resident of the first-mentioned State, for the purpose of determining the taxable profits of the payer.

4. Enterprises of one Contracting State, in which the capital is wholly or partially owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first Contracting State to taxation or requirements related to taxation that are different or more burdensome than those imposed on other similar enterprises in the first Contracting State.

5. This Article does not require a Contracting State to grant residents of the other Contracting State any personal allowances, reliefs, or reductions for tax purposes based on civil status or family responsibilities that it grants to its own residents.

6. Nothing in this Article prevents a Contracting State from imposing the taxes described in Article 10 (Dividends) paragraph 4 or Article 11 (Interest) subparagraph (b).

7. The provisions of this Article apply to taxes of every kind imposed by a Contracting State, including those imposed by political subdivisions or local authorities thereof.

ARTICLE 25: Mutual Agreement Procedure

1. If a person believes that the actions of one or both Contracting States result in taxation contrary to the provisions of the Agreement, they may present their case to the competent authority of the Contracting State of which they are a resident or national, regardless of any remedies available under domestic law.

2. The competent authority shall endeavor, if it finds the objection justified and cannot resolve it alone, to reach a mutual agreement with the competent authority of the other Contracting State to avoid taxation contrary to the Agreement. Any agreement reached shall be implemented, even if it exceeds any time limits or procedural restrictions under domestic law, provided the competent authority of the other Contracting State is notified within five years after the end of the taxable year to which the case pertains.

3. The competent authorities may mutually agree to resolve difficulties or doubts about interpreting or applying the Agreement. They may agree on: a) Attribution of income, deductions, credits, or allowances to a permanent establishment in one Contracting State of an enterprise from the other Contracting State; b) Allocation of income, deductions, credits, or allowances between persons; c) Characterization of specific income items; d) Application of source rules to specific income items; e) Common interpretation of terms; f) Adjustments to specific dollar amounts to reflect economic or monetary developments; and g) Application of domestic law provisions regarding penalties, fines, and interest consistent with the Agreement’s purposes.

4. The competent authorities may communicate directly to reach agreements as described in preceding paragraphs.

ARTICLE 26: Exchange of Information

1. The competent authorities of the Contracting States shall exchange information necessary for applying the Agreement or domestic laws concerning covered taxes, to the extent such taxation does not conflict with the Agreement. Exchange of information is not limited by Article 1 (Personal Scope). Information received by a Contracting State shall be treated as confidential under its domestic laws and disclosed only to relevant persons or authorities involved in tax assessment, collection, administration, enforcement, prosecution, or appeals. It may be disclosed in public court proceedings or judicial decisions.

2. Paragraph 1 does not impose on a Contracting State the obligation to: a) Implement administrative measures conflicting with its or the other Contracting State’s laws or administrative practices; b) Provide information that cannot be obtained under its normal administrative procedures or laws; c) Provide information disclosing trade secrets, business processes, or information contrary to public policy.

3. Upon request by one Contracting State under this Article, the other Contracting State shall obtain and provide information as if the requested tax were its own, and comply as much as possible with the requesting State’s laws and administrative practices, in a manner consistent with the request’s purpose.

4. This Article applies to all kinds of taxes imposed by a Contracting State, notwithstanding the provisions of Article 2 (Taxes Covered).