05.08.2024/37
Withholding Rates Applied at 0% to KKM Accounts Increased and Some Withholding Rates Temporarily Reduced Extended
With the Presidential Decree No. 8775 published in the Official Gazette dated 01.08.2024 and numbered 32619, the Decree No. 2006/10731 was amended.
Accordingly, the withholding tax rates applied to FX-protected deposit accounts have been increased and the period of application of the withholding tax rates applied to certain earnings at low rates has been extended temporarily.
The changes made are presented in the table below on a comparative basis by financial instruments:
| 1- Withholding Tax Rates for Deposit Interests and Profit Shares | ||
|---|---|---|
| Relevant Instrument | Old Rate | New Rate |
| For time deposit accounts protected against exchange rate fluctuations and accounts converted into Turkish lira based on the conversion rate from foreign currency deposit accounts with a maturity of up to 6 months | 0% | 7.5% |
| For time deposit accounts protected against exchange rate fluctuations and accounts converted into Turkish lira based on the conversion rate from foreign currency deposit accounts with a maturity of up to 1 year | 0% | 5% |
| For accounts converted into Turkish lira based on the conversion price from gold deposit accounts with a maturity of up to 6 months | 0% | 7.5% |
| For accounts converted into Turkish lira based on the conversion price from gold deposit accounts with a maturity of up to 1 year | 0% | 5% |
| 2- Withholding Tax Rates on Profit Shares Paid by Participation Banks | ||
| Relevant Instrument | Old Rate | New Rate |
| For time deposit accounts protected against exchange rate fluctuations and accounts converted into Turkish lira based on the conversion rate from foreign currency deposit accounts with a maturity of up to 6 months | 0% | 7.5% |
| For time deposit accounts protected against exchange rate fluctuations and accounts converted into Turkish lira based on the conversion rate from foreign currency deposit accounts with a maturity of up to 1 year | 0% | 5% |
| For accounts converted into Turkish lira based on the conversion price from gold deposit accounts with a maturity of up to 6 months | 0% | 7.5% |
| For accounts converted into Turkish lira based on the conversion price from gold deposit accounts with a maturity of up to 1 year | 0% | 5% |
On the other hand, Provisional Articles 2, 3, 3, 4 and 5 of the Decree No. 2006/10731 regulate the withholding taxes to be applied at lower rates. With the amendment, the 0% withholding tax rate applied to FX-protected deposit accounts was increased to the rates mentioned above. The rates applied to other instruments have been extended until 31.10.2024.
You can access the explanations regarding the other withholding tax rates in our circular.
The regulation entered 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 01.08.2024 and for the interest and dividends to be paid to time deposit accounts opened or renewed as of the said date.
The relevant Presidential Decree is available here.
Sincerely,
BİLGENER
