02.01.2023/3
Deadlines for the Application of Reduced Withholding Tax Rates for Certain Withholdings Under the Temporary Article 67 of the Income Tax Law Have Been Extended
With the Presidential Decree No. 6618, published in the Official Gazette dated 29/12/2022 and numbered 32058 (Decree), changes were made to the Council of Ministers Decree No. 2006/10731, extending the period for the application of reduced withholding tax rates for income derived from deposit and participation accounts, foreign currency protected deposit accounts, some investment funds, and bank financing bond income until 30.06.2023.
Additionally, the Decree also stipulates that the withholding tax rate applied to income and gains from products issued by mortgage financing institutions will continue to be 5% until 30.06.2023.
The withholding tax rates under the Decree are as follows:
1) Withholding Tax Rates on Deposit Interest and Profit Share
a) Withholding Tax Rates on Deposit Interest
i) For demand and notice accounts and accounts with maturities of up to 6 months (including 6 months): 5%
ii) For accounts with maturities of up to 1 year (including 1 year): 3%
iii) For accounts with maturities longer than 1 year: 0%
iv) For accounts with a variable interest rate based on inflation for more than 1 year: 0%
v) For foreign currency protected time deposit accounts and foreign currency deposit accounts converted to Turkish lira based on the conversion rate: 0%
vi) For gold deposit accounts converted to Turkish lira based on the conversion price: 0%
b) Withholding Tax Rates on Profit Shares Paid by Participation Banks in Exchange for Participation Accounts
i) For demand, notice, and special current accounts and accounts with maturities of up to 6 months (including 6 months): 5%
ii) For accounts with maturities of up to 1 year (including 1 year): 3%
iii) For accounts with maturities longer than 1 year: 0%
iv) For foreign currency protected participation accounts and participation fund accounts converted to Turkish lira based on the conversion rate: 0%
v) For gold participation fund accounts converted to Turkish lira based on the conversion price: 0%
2) Withholding Tax Rates on Bank Bonds and Bills and Lease Certificates Issued by Asset Leasing Companies with Banks as Fund Users, and Withholding Tax on Income from Investment Funds
a) Withholding Tax Rates on Lease Certificates
i) For income from certificates with maturities up to 6 months (including 6 months): 5%
ii) For income from certificates with maturities up to 1 year (including 1 year): 3%
iii) For income from certificates with maturities longer than 1 year: 0%
iv) For income from certificates held for less than 6 months (including 6 months) before being sold: 5%
v) For income from certificates held for less than 1 year (including 1 year) before being sold: 3%
vi) For income from certificates held for more than 1 year before being sold: 0%
b) Withholding Tax Rate on Income from Investment Funds
Income and gains from investment funds (excluding variable, mixed, eurobond, foreign debt, foreign, free funds, and those with “foreign currency” in the name) will be subject to a withholding tax rate of 0%.
3) Withholding Tax Rate on Income and Gains from Products Issued by Mortgage Financing Institutions
For income and gains from asset-backed securities, mortgage-backed securities, mortgage collateralized securities, and asset collateralized securities issued by mortgage financing institutions acquired between 28.06.2022 and 30.06.2023 (including 30.06.2023), the withholding tax rate will continue to be 5% until 30.06.2023.
You can access the relevant Presidential Decree here.
Best regards,
BİLGENER
