A guide for expats on the Automatic Exchange of Information in Turkey. Are your Turkish bank accounts, real estate, and vehicles being reported to the authorities? Learn the risks and legal facts.
One of the most pressing concerns for Turkish citizens and expatriates living abroad in recent years is the “Automatic Exchange of Financial Information” (within the scope of the Common Reporting Standard – CRS).
Residents living in countries such as Germany, France, the Netherlands, Belgium, the UK, and Austria are rightfully worried: Will my savings in Turkey be reported to the tax authorities in the country where I live?
In this article, we will examine the scope of this information exchange, the status of real estate assets, and the legal details you need to be aware of.
What is the Automatic Exchange of Information?
Developed under the guidance of the OECD to prevent international tax evasion, this system allows countries to share financial data. Turkey is a signatory to this agreement.
The essence of the system is as follows: If financial institutions (banks) in Turkey determine that an account holder is a tax resident in another country, they report this account information to the Turkish Revenue Administration. In turn, the Revenue Administration shares this data with the tax authority of the relevant country under the principle of reciprocity.
What Information Is Shared?
Not every piece of data is shared. The exchange is strictly limited to financial accounts. The data shared includes:
- The account holder’s name, surname, and address,
- Country of residence and Tax Identification Number (TIN),
- Account number and account balance (as of the end of the year),
- Gross amounts of interest, dividends, or other income paid into the account during the year.
Important Note: Detailed account transactions (e.g., “Money sent to Uncle Ahmet” or “Supermarket spending”) are not shared. Only the year-end balance and gross income types are reported.
Are Real Estate and Vehicle Records Shared?
This is the most critical point for expatriates. The automatic exchange of information covers only financial assets. The following assets are NOT included in the system and are not reported:
- Immovable properties in Turkey (Houses, land, fields, shops – Title Deeds),
- Registered vehicles (Cars, trucks, etc.),
- Physical assets kept in safe deposit boxes at banks (Gold, cash, etc.).
However, there is a nuance: If you earn rental income from a property in Turkey and this money is deposited into a bank account, that money becomes part of your “account balance” and falls within the scope of financial information.
How Does This Affect You?
If you receive social welfare benefits in your country of residence or if you have not declared your income in Turkey on your tax return, this data exchange could lead to:
- Retrospective tax audits by the tax office of your country of residence.
- Demands for the repayment of social benefits deemed to have been received unfairly.
- Potential legal and financial penalties.
What Should You Do?
Banks determine the account holder’s country of residence based on the “Address Registration System” and the contact addresses provided to the bank.
If your address in bank records appears as “foreign/abroad,” the system may automatically add you to the reporting list. However, if you spend a significant part of the year in Turkey or maintain a residence there, your “Tax Residency” status must be legally and correctly determined.
It is crucial to manage this process under the supervision of a lawyer to update bank records correctly and determine your residency status. Acting on hearsay (such as panic-withdrawing funds) can classify your actions as “suspicious transactions” and put you in a more difficult position.
At Ebibli Law Office, we provide consultancy services to protect the assets and legal status of our clients living abroad.
Disclaimer: This article is for general informational purposes only. As every legal case has unique circumstances, it is recommended to seek professional legal advice to prevent any loss of rights.