Article 26 - EXCHANGE OF INFORMATION

   Article 26 provides for the exchange of information between

the competent authorities of the Contracting States. The infor­

mation to be exchanged is that necessary for carrying out the
provisions of the Convention or the domestic laws of the United

States or Turkey concerning the taxes covered by the Convention.

This article covers all taxes imposed at the national level by
the two Contracting States.

Paragraph 1

   Paragraph 1 states that information exchange is not re­

stricted by Article 1 (Personal Scope) . This means that informa­ tion may be requested and provided under this Article with

respect to persons who are not residents of either Contracting

State. For example, if a third-country resident has a permanent establishment in Turkey, and that permanent establishment engages

in transactions with a U.S. enterprise, the United States could
request information with respect to that permanent establishment,
even though it is not a resident of either Contracting State.
Similarly, if a third-country resident maintains a bank account
in Turkey, and the Internal Revenue Service has reason to believe

that funds in that account should have been reported for U.S. tax

purposes but have not been so reported, information can be
requested from Turkey with respect to that person's account.

   The taxes covered by the Convention for purposes of this
Article constitute a broader category of taxes than those

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referred to in Article 2 (Taxes Covered). As provided in
paragraph 4, for purposes of exchange of information, covered
taxes include all taxes imposed by the Contracting States.
Exchange of information with respect to domestic laws is
authorized insofar as the taxation is not contrary to the
Convention. Thus, for example, information may be exchanged with
respect to a covered tax, even if the transaction to which the
information relates is a purely domestic transaction in the
requesting State and, therefore, the exchange is not made for the
purpose of carrying out the Convention.

Paragraph I also provides assurances that any information

exchanged will be treated as secret, subject to the same disclo­
sure constraints as information obtained under the laws of the
requesting State. Information received may be disclosed only to
persons, including courts and administrative bodies, concerned
with the assessment, collection, enforcement or prosecution in
respect of the taxes to which the information relates, or to
persons concerned with the administration of these taxes. The
information must be used by these persons in connection with
these designated functions. Persons concerned with the adminis­
tration of taxes in the United States include legislative bodies,
such as the tax-writing committees of Congress and the General
Accounting Office. Information received by these bodies is for
use in the performance of their role in overseeing the
administration of U.S. tax laws. Information received may be
disclosed in public court proceedings or in judicial decisions.

   It is contemplated that the Contracting States will utilize
Article 26 to exchange information on a routine basis, on request
in relation to. a specific case, or spontaneously.

Paragraph 2

Paragraph 2 explains that the obligations undertaken in paragraph 1 to exchange information do not require a Contracting

State to carry out administrative measures that are at variance

with the laws or administrative practice of either State. Nor is
either State obliged to supply information not obtainable under
the laws or administrative practice of either State, or to
disclose trade secrets or other information, the disclosure of

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which would be contrary to public policy (ordre public)
However, either Contracting State may, subject to the limitations
of this paragraph and its internal law, provide information which
it is not obligated to provide under this Article.

   It is understood that information contained in banking
documents, including, for example, banking documents pertaining
to third persons involved in transactions with residents of
either Contracting State, will be made available under this
Article. Thus, any domestic laws regarding bank secrecy will not
be invoked to prevent or undermine the effective exchange of
information or documents under this Article.

   Paragraph 3

Paragraph 3 provides that when information is requested by a
Contracting State in accordance with this Article, the other
Contracting State is obligated to obtain the requested informa­
tion as if the tax in question were the tax of the requested
State, even if that State has no direct tax interest in the case
to which the-request relates. The paragraph further provides
that the requesting State may specify the form in which informa­
tion is to be provided. The requested State should, if possible
under its laws and administrative practice, provide the informa­
tion in the form requested so as to permit the exchange to help
carry out the purposes of the Article. If, for example, the
requesting State intends to use the requested information in a
judicial proceeding, it may wish to have the information in the
form of depositions of witnesses or authenticated copies of
original documents.

   Paragraph 4

   Paragraph 4 provides that the competent authorities may
exchange information concerning every tax imposed by a Contract­
ing State, not just the taxes listed in Article 2 (Taxes Cov­
ered). Customs duties are not considered taxes for this purpose.