Learn the legal, banking, currency, tax, withholding, and double taxation rules affecting salary payments made to foreign professional athletes in Turkey.

Foreign athletes employed by Turkish sports clubs may request that their salaries, signing bonuses, match payments, and other contractual benefits be paid in foreign currency or transferred directly to bank accounts outside Turkey.

Although cross-border salary payments are generally possible, the payment method does not remove Turkish employment, sports, tax, social security, or banking obligations. A salary earned under a Turkish sports contract may remain taxable in Turkey even when it is paid in euros, US dollars, or another currency to a foreign bank account.

The employment contract should therefore clearly regulate the currency, payment date, bank charges, exchange-rate risks, taxes, and consequences of delayed or incomplete payment.

Can a Turkish Club Pay an Athlete Abroad?

A Turkish club may transfer an athlete’s salary to a foreign bank account if the contractual and banking requirements are satisfied.

However, the club should retain documents explaining the legal basis of the payment, including:

• the sports employment contract;
• payment schedule;
• invoice or payroll records where applicable;
• athlete identification information;
• foreign bank details;
• tax withholding records;
• and evidence that the payment has been reported correctly.

The fact that money is transferred abroad does not automatically make it foreign-source income. The source of salary income is generally connected with the employment activity, employer, and place where the sporting services are performed.

Salary Currency in Athlete Contracts

Professional athlete contracts frequently determine salary in euros or US dollars, particularly where the athlete is recruited internationally.

The contract should state:

• the agreed currency;
• whether payment will be made in that currency or its Turkish-lira equivalent;
• the exchange rate to be used;
• the date on which conversion will occur;
• who bears transfer and intermediary bank charges;
• and what happens if foreign-currency transfers are restricted or delayed.

Expressions such as “payment at the current exchange rate” may create disputes because different exchange rates may apply. The contract should identify the relevant bank or official exchange-rate source and whether the buying, selling, effective buying, or effective selling rate will be used.

Gross and Net Salary Clauses

One of the most important provisions is whether the athlete’s salary is agreed as gross or net.

Under a gross-salary clause, applicable income tax, social security contributions, and other deductions may be withheld from the agreed amount.

Under a net-salary clause, the club usually promises that the athlete will receive the specified amount after mandatory deductions. The club may therefore be responsible for increasing the gross payment to cover taxes.

The contract should also explain whether the net guarantee covers:

• annual income tax declarations;
• additional tax assessments;
• penalties and interest;
• foreign taxes;
• social security contributions;
• and changes in tax legislation.

A poorly drafted net clause may lead to substantial disputes when the athlete is later required to file an annual tax return.

Turkish Withholding Tax

Payments characterized as salary may be subject to Turkish income tax withholding. The club generally has payroll and reporting responsibilities under the applicable tax regime.

The Turkish Revenue Administration confirms that salary income may be taxed through withholding and that non-resident individuals whose Turkish salary income has been fully taxed at source may, in certain circumstances, not be required to submit an annual declaration for that income.

Whether an athlete must also file an annual return depends on matters such as:

• tax residency;
• number of employers;
• total annual income;
• whether the salary was taxed through withholding;
• additional sponsorship or image-rights income;
• and applicable annual thresholds.

The parties should not assume that withholding by the club always represents the athlete’s final tax obligation.

Does Payment Abroad Avoid Turkish Tax?

No.

A Turkish-source salary does not become exempt simply because it is transferred to a bank outside Turkey. Tax authorities examine the underlying employment relationship and the place where the services are performed.

For limited taxpayers, income earned from activities performed in Turkey may remain taxable in Turkey. The location of the bank account is therefore not decisive.

Similarly, splitting payments between a Turkish account and a foreign account does not automatically change their legal character.

Foreign-Currency Salary Exemption

Turkish tax legislation contains a limited exemption for certain salaries paid in foreign currency by employers whose legal and business centres are outside Turkey, provided all statutory conditions are satisfied.

Official guidance indicates that the exemption may apply where, among other conditions, the foreign employer funds the salary from income earned outside Turkey and pays the employee in foreign currency.

This exemption should not normally be assumed to apply to an athlete employed by a Turkish sports club. The employer’s residence, source of funds, contractual structure, and actual working relationship must be reviewed carefully.

Merely arranging payment through a foreign affiliate does not necessarily create an exemption.

Double Taxation Agreements

A foreign athlete may remain connected with another country while living and playing in Turkey. This can create a risk that both countries claim taxing rights over the same income.

Turkey’s double taxation agreements commonly contain separate rules for employment income and income earned by athletes and entertainers. The country in which the sporting activity is performed may often tax the related income.

Treaty protection may require:

• a valid tax-residency certificate;
• payment records;
• proof of taxes withheld;
• employment and sponsorship agreements;
• and evidence showing where the sporting activity took place.

Some treaties may also allow Turkey to tax income routed through another company where the payment is connected with the athlete’s performance in Turkey.

Sponsorship and Image-Rights Payments

Clubs and athletes sometimes separate salary from sponsorship, advertising, or image-rights income.

This may be lawful where the arrangements reflect genuine and separate commercial activities. However, merely describing part of the athlete’s salary as an image-rights payment does not guarantee different tax treatment.

Tax authorities may examine:

• whether the payment is linked to playing duties;
• who owns and licenses the relevant rights;
• whether the payer is the club or an independent sponsor;
• whether separate services were performed;
• and whether the amount reflects market value.

Artificial payment structures may result in tax reassessment, penalties, and interest.

Banking and Compliance Checks

Large international transfers may be reviewed by banks under anti-money laundering, customer identification, sanctions, and payment-compliance procedures.

Banks may request:

• the athlete’s contract;
• passport and tax number;
• proof of address;
• source-of-funds documentation;
• payroll records;
• and explanations of bonuses or termination payments.

The club should use clear payment descriptions and retain all transfer receipts. Informal cash payments or transfers through unrelated third parties create serious evidentiary and compliance risks.

Late or Missing Cross-Border Payments

Where the club fails to pay the athlete on time, the athlete may rely on the contract, applicable sports regulations, federation procedures, and general legal remedies.

Evidence should include:

• the signed contract;
• payment calendar;
• bank statements;
• formal notices;
• bonus conditions;
• match records;
• and correspondence with the club.

The athlete may claim the unpaid principal amount, contractual interest, default interest, penalties, and other losses where legally available.

A partial payment should not automatically be accepted as full settlement unless the athlete clearly intends to waive the remaining claim.

Termination Payments and Severance

Cross-border transfers may also involve:

• compensation following termination;
• settlement payments;
• unpaid bonuses;
• transfer-related payments;
• and damages awarded by a sports tribunal or court.

The tax treatment depends on the actual nature of the payment. Calling an amount “compensation” does not necessarily make it tax-free.

Settlement agreements should allocate amounts carefully and state whether the figures are gross or net, which deductions apply, and when payment must be completed.

Legal Remedies and Appeal Process

A foreign athlete facing unpaid salary, unlawful deductions, or incorrect tax treatment may consider:

1. sending a formal payment notice;
2. requesting payroll and withholding records;
3. initiating federation or sports arbitration proceedings;
4. filing a contractual claim before the competent authority;
5. commencing enforcement proceedings where permitted;
6. challenging an incorrect tax assessment;
7. requesting correction from the tax administration;
8. applying treaty remedies in cases of double taxation.

Tax and sports-law procedures may have strict and different deadlines. The contractual dispute and tax dispute should therefore be managed separately but consistently.

Frequently Asked Questions

1. Can a Turkish club pay an athlete’s salary to a foreign bank?

Yes, provided the contract, banking documentation, tax reporting, and compliance requirements are satisfied.

2. Is salary paid abroad exempt from Turkish tax?

No. The bank account’s location does not generally determine the source of employment income.

3. Can salary be agreed in euros?

It may be, subject to the applicable contract and currency rules. The conversion and payment method should be clearly defined.

4. Who pays transfer fees?

The contract should specify whether the club or athlete bears intermediary and receiving-bank charges.

5. What is the difference between gross and net salary?

A gross salary is subject to deductions. A net salary clause generally promises a stated amount after specified deductions.

6. Can the club pay part of the salary through an image-rights company?

Only where the arrangement reflects genuine commercial activity and complies with tax and contractual rules.

7. Can the athlete be taxed in two countries?

Yes. A double taxation agreement or foreign tax credit may reduce or resolve double taxation.

8. What should an athlete do if the club underpays because of exchange rates?

The contract’s exchange-rate clause should be reviewed, followed by a formal demand and the appropriate sports or legal proceedings.

Client-Focused Legal Support

Cross-border athlete payments should be structured before the employment contract is signed. Clear provisions concerning currency, taxes, withholding, bank charges, and default reduce the risk of costly disputes.

Lawyer Fırat Fesih Kaya and Fırat Fesih Kaya Law Office advise international athletes, agents, clubs, and sports companies on cross-border salaries, tax clauses, unpaid wages, image-rights payments, double taxation, and sports disputes in Turkey.

Phone: +90 312 434 22 22
Mobile: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr

Address: Mevlana Boulevard No:221, Yıldırım Tower No:148, 06520 Balgat, Çankaya, Ankara, Turkey

Legal Disclaimer: This article provides general information and does not constitute legal or tax advice. The applicable rules depend on the contract, athlete’s tax residence, payment source, currency, sports federation, and relevant double taxation agreement.