Turkish bank account data transferred to German tax authority; 6 million diaspora face investigation

Under the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information, which Turkey put into effect on May 31, 2021, account information on Turkish bank deposits exceeding $1,000 is being regularly transmitted to the tax authorities of the countries where diaspora Turks reside. Over the past two years, data transfer has become fully automated and the frequency of transfers has increased noticeably.

Turks in many European countries, particularly Germany, have begun receiving official notices from the tax administrations of their countries of residence. The German tax authority is directing questions to individuals showing account balances: "What is the source of this amount?" and "Why did you not declare this previously?" If the money was sent from Germany by bank transfer, the source can be verified and no problem arises; however, amounts brought in cash from Turkey or those with undocumented origins create grounds for money laundering investigations and tax evasion charges.

The agreement was part of the steps that enabled Turkey to exit the grey list of the Financial Action Task Force (FATF). According to a spokesperson, this arrangement affects approximately 6 million diaspora members. Non-resident citizens with income or accounts in Turkey need to review their tax obligations in their countries of residence.