Search

 

Cablegate: Turkish Government Fully Resolves Citibank Tax

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS ANKARA 009181

SIPDIS


SENSITIVE


STATE FOR E, EB AND EUR/SE
TREASURY FOR OASIA - MILLS AND LEICHTER
USDOC FOR 4212/ITA/OEURA/CDP/DDEFALCO
STATE PASS USTR - NOVELLI AND BIRDSEY


E.O. 12958: N/A
TAGS: ECON EINV PREL TU
SUBJECT: TURKISH GOVERNMENT FULLY RESOLVES CITIBANK TAX
PROBLEM

REF: ANKARA 8255


Sensitive but Unclassified. Not for internet distribution.


1. (SBU) Citibank General Manager for Turkey Mark Robinson
informed us December 23 that Turkish Finance Minister Kemal
Unakitan reversed a Finance Ministry tax assessment of
Citibank and its foreign clients who invest in Turkish
T-bills through Citibank. As described reftel, a Finance
Ministry tax inspector had earlier denied Citibank's clients
the preferred foreign investor tax rate on T-bill income (11
percent versus the normal rate of 44 percent), and made an
enormous assessment of back taxes. Citibank received the
formal MinFin letter canceling this assessment December 28.
Robinson thanked us for Embassy's help in resolving this tax
problem.


Comment: A Victory, But Also An Explanation
for Turkey's Risk Premium
--------------------------------------------


2. (SBU) Unakitan's action to cancel this tax assessment
averts potential damage to the T-bill market. Citibank wanted
this claim resolved before year-end, at which time fund
managers would have had to disclose this tax claim to their
investors. Unakitan's action also gives us an early example
of the new GOT's interest in helping to resolve foreign
investment tangles with the Turkish bureaucracy.


3. (SBU) Nevertheless, as Citibank country risk manager
Peter Rossiter commented, this kind of outrageous tax
assessment helps explain why there is a large risk premium on
Turkish T-bills. Unpredictability of regulatory and legal
treatment is a big factor. Rossiter said Citibank would
follow up this victory by working with the Turkish Ministry
of Finance to clarify the tax regulatory treatment of foreign
investors and thus ensure that such assessments won't be
levied in the future.
PEARSON

© Scoop Media

 
 
 
World Headlines

 


Myanmar: Military Must Stop Murdering And Jailing Protestors – Bachelet

UN High Commissioner for Human Rights Michelle Bachelet on Thursday said security forces in Myanmar must “halt their vicious crackdown on peaceful protestors,” following another day of deadly violence across the country on Wednesday... More>>

Syria: Economic Decline, Rising Hunger And Surging Humanitarian Needs

Syria’s fragile economy has “suffered multiple shocks” over the past 18 months, with its currency plummeting and joblessness swelling as people struggle to cover their basic needs, the UN Emergency Relief Coordinator told the Security Council ... More>>

OECD: Final Quarter Of 2020 Shows Continued Recovery In G20 International Merchandise Trade

G20 international merchandise trade continued to rebound in the fourth quarter of 2020 ( exports up 7.2% and imports up 6.8%), following the sharp falls seen in the first half of 2020, as lockdown measures affected trade globally. Although growth ... More>>


Focus On: UN SDGs


UNFCCC: Greater Climate Ambition Urged As Initial NDC Synthesis Report Is Published

UN Climate Change today published the Initial NDC Synthesis Report, showing nations must redouble efforts and submit stronger, more ambitious national climate action plans in 2021 if they’re to achieve the Paris Agreement goal of limiting global temperature rise by 2°C—ideally 1.5°C—by the end of the century... More>>


2021: Critical Year To ‘reset Our Relationship With Nature’ – UN Chief

During this time of “crisis and fragility”, the UN chief told the United Nations Environment Assembly on Monday that human well-being and prosperity can be vastly improved by prioritizing nature-based solutions. Painting a picture of the turmoil ... More>>


Paris Agreement: UN Secretary-General António Guterres To Mark U.S. Reentry With Envoy For Climate John Kerry

Watch live at webtv.un.org UN Secretary-General António Guterres will join U.S. Special Presidential Envoy for Climate John F. Kerry at an event marking the United States’ reentry into the Paris Agreement this Friday. The discussion with the Secretary-General ... More>>