| Turkish Participation Exemption For Domestic Subsidiaries | Dutch Participation Exemption For Domestic Subsidiaries |
|---|
| • Only shareholdings which are disposed after being held for at least two full years, may benefit from the % 75 capital gain exemption | • No minimum holding period of the subject subsidiaries prior to the disposal. Qualifying subsidiaries benefit from a % 100 capital gain exemption. |
| • No dividend distribution for 5 years | • No time limit/waiting period for dividend distributions |
| • The sales price should be collected before the end of the second calendar year following the year of sale | • No specific deadline regarding the collection of sales price |
| • Share transfer between related parties and group companies, which do not provide additional opportunities in economic terms, will be excluded from the scope of the exemption | • No specific requirement regarding the purpose of the transaction |
| • Transfer, alienation or clearing of shares without receiving cash in return falls outside the scope of the % 75 capital gain exemption | • No cash collection requirement |
| • Each foreign subsidiary in which the Turkish resident joint stock company has a participation must either be a joint stock company or a limited liability company | • The Dutch holding company should at least have % 5 of the par value of the paid up share capital of a foreign subsidiary of which the equity is wholly or partly divided into shares |
| • As of the date of disposal, % 75 or more of the assets of the Turkish resident joint stock company, excluding liquid assets, must be composed of foreign subsidiaries for a continuous period of at least one year | • No limitation with regard to balance sheet of the Dutch holding company |
| • During the test and calculation of the % 75 asset requirement only the subsidiaries in which the Turkish resident joint stock company has a participation of at least % 10 will be taken into consideration | • No limitation with regard to balance sheet of the Dutch holding company |
| • The Turkish resident joint stock company must hold the shares of each foreign subsidiary for at least two years prior to the transfer of the shares | • No minimum holding period requirement |
| • The Turkish holding company should at least have % 10 of the par valuo of the paid up share capital of a foreign subsidiary which must either be a joint stock company or a limited liability company | • The Dutch holding company should at least have % 5 of the par value of the paid up share capital of a foreign subsidiary of which the equity is wholly or partly divided into shares |
| • As of the date of dividend collection, the foreign subsidiary should have been hold by the THC at least for a year | • No limitation with regard to minimum holding period |
| • The foreign subsidiary’s profit should have been subject to a minimum effective tax burden of % 15 | • If the foreign subsidiary is an active participation, minimum effective tax burden is not a requirement to be fulfilled. If not, the foreign company should be subject to a minimum effective tax rate of % 10 based on Dutch tax principles |
| • The dividends of a particular financial year must be distributed to THC before the date on which THC files Turkish corporate income tax return of the related year. | • No limitation with regard to the timing of the distribution of dividents as well as the physical transfer thereof |
