02.05.2024/25
Reduced Application of Certain Withholding Taxes Pursuant to Provisional Article 67 of the Income Tax Law Ended
With the Presidential Decree (Decree) numbered 8434 published in the Official Gazette dated 01.05.2024 and numbered 32533, the Council of Ministers Decree numbered 2006/10731 was amended and the application of reduced withholding tax for deposit and participation accounts, some investment funds and bank financing bond income was amended.
Comparative changes made on the basis of financial instruments are presented in the table below:
| 1- Deposit Interest Rates and Withholding Tax Rates on Profit Shares |
|---|
| Relevant Instrument | Old Rate | New Rate |
| Demand and notice accounts, as well as accounts with up to 6 months (including 6 months) maturity | 5% | 7.50% |
| Accounts with up to 1 year (including 1 year) maturity | 3% | 5% |
| Accounts with more than 1 year maturity | 0% | 2.50% |
| Accounts with inflation-linked variable interest rates for maturities over 1 year | 0% | 0% |
| Currency-protected time deposit accounts and foreign currency deposit accounts converted to Turkish lira at the exchange rate | 0% | 0% |
| Gold deposit accounts converted to Turkish lira at the conversion rate | 0% | 0% |
| 2- Withholding Tax Rates on Profit Shares Paid in Return for Participation Accounts by Participation Banks |
| Relevant Instrument | Old Rate | New Rate |
| Non-demand and notice accounts, as well as term deposits up to 6 months (inclusive) | 5% | 7.50% |
| Term deposits up to 1 year (inclusive) | 3% | 5% |
| Term deposits over 1 year | 0% | 2.50% |
| Term deposits with variable interest rates based on inflation over 1 year | 0% | 0% |
| Currency-protected term deposits and foreign currency deposit accounts converted into Turkish lira at the exchange rate | 0% | 0% |
| Gold-denominated deposit accounts converted into Turkish lira at the conversion price | 0% | 0% |
| 3- Withholding Tax Rates on Income and Profits from Bonds, Bills, and Lease Certificates Issued by Banks |
| Relevant Instrument | Old Rate | New Rate |
| Income from instruments with a maturity of up to 6 months (inclusive) | 5% | 7.50% |
| Income from instruments with a maturity of up to 1 year (inclusive) | 3% | 5% |
| Income from instruments with a maturity of over 1 year | 0% | 2.50% |
| Gains from the disposal of instruments held for less than 6 months (inclusive) | 5% | 7.50% |
| Gains from the disposal of instruments held for less than 1 year (inclusive) | 3% | 5% |
| Gains from the disposal of instruments held for more than 1 year | 0% | 2.50% |
| 4- Withholding Tax Rates on Income from Investment Funds |
| Relevant Instrument | Old Rate | New Rate |
| Income and profits from investment funds (excluding variable, mixed, eurobond, foreign debt, foreign, free funds and funds with “foreign currency” in their title) | 0% | 7.50% |
| 5- Withholding Tax Rates on Income and Profits from Products Issued by Mortgage Financing Institutions |
| Relevant Instrument | Old Rate | New Rate |
| Income and profits from asset-backed securities, mortgage-backed securities, mortgage collateralized securities, and asset collateralized securities issued by mortgage financing institutions between 28.06.2022 and 31.07.2024 (inclusive) | 5% | 7.50% |
Enforcement: The rates in sections 1 and 2 shall enter into force on the date of its publication to be applied for the interest and dividends to be paid to demand and special current accounts as of 1.5.2024 and for the interest and dividends to be paid to time deposit accounts opened or renewed as of the said date.
The rates in sections 3 and 4 shall enter into force on the date of publication to be applied to income and gains from bonds and bills issued by banks acquired as of 1.5.2024, income and gains from lease certificates issued by asset leasing companies where the fund user is these banks, and income and gains from investment fund participation shares.
The rates in section 5 shall enter into force on the date of publication to be applied for the income and gains derived from asset-backed securities, mortgage-backed securities, mortgage-backed securities, mortgage-backed securities and asset-backed securities issued by mortgage financing institutions established within the scope of Law No. 6362 (including asset financing funds and housing finance funds founded by these companies) acquired as of 1.5.2024.
You can access the relevant Decision here.
Sincerely,
BİLGENER
