29.12.2023/102
The Periods for the Reduced Application of Certain Withholding Taxes Pursuant to Provisional Article 67 of the Income Tax Law have been Extended
With the Presidential Decree (Decree) No. 8002 published in the Official Gazette No. 32413 dated 28.12.2023 and numbered 32413, the reduced withholding tax period applied to the income from deposit and participation accounts and exchange rate protected deposit accounts and some mutual funds and bank financing bond income was extended until 30.04.2024 by amending the Council of Ministers Decree No. 2006/10731
The withholding tax rates under the Decree are listed below:
1) Withholding Tax Rates on Deposit Interest and Dividends
a) Withholding Tax Rates on Deposit Interest
i) 5% for demand and notice accounts and time deposit accounts up to 6 months (including 6 months),
ii) 3% for time deposits up to 1 year (including 1 year),
iii) 0% for accounts with maturities longer than 1 year,
iv) For accounts with maturities longer than 1 year with variable interest rates based on the inflation rate, 0%,
v) 0% for time deposit accounts with exchange rate protection and foreign currency deposit accounts converted into Turkish lira at the conversion rate.
vi) 0% for gold deposit accounts converted into Turkish Lira at the conversion price.
b) Withholding Tax Rates on Dividends Paid by Participation Banks against Participation Accounts
i) 5% for demand, notice and special current accounts and time deposits up to 6 months (including 6 months),
ii) 3% for time deposits up to 1 year (including 1 year),
iii) 0% for accounts with maturities longer than 1 year.
iii) 0% for accounts with maturities longer than 1 year.
v) 0% for participation accounts converted into Turkish lira at the conversion price from gold-denominated participation fund accounts.
2) Withholding Tax Rates Applied to Bank Bonds and Bills and Lease Certificates Issued by Asset Leasing Companies where the Fund User is Banks and Withholding Tax Applied to Earnings from Investment Funds
a) Withholding Tax Rates Applied to Lease Certificates
i) 5% from income provided to those with maturities up to 6 months (including 6 months),
ii) 3% from income provided to those with maturities up to 1 year (including 1 year),
iii) 0% from income provided to those with maturities longer than 1 year,
iv) 5% of gains arising from the disposal of assets held for less than 6 months (including 6 months),
v) 3% on gains arising from the disposal of assets held for less than 1 year (including 1 year),
vi) 0% on gains arising from the disposal of assets held for more than 1 year.
b) Withholding Tax Rate Applied to Earnings from Investment Funds
Income and gains derived from mutual funds (excluding variable, mixed, eurobond, foreign borrowing, foreign, hedge funds and mutual funds with the expression “foreign currency” in their titles) will be subject to 0% withholding tax.
3) Withholding Tax Rate Applicable to Income and Gains from Products Issued by Mortgage Finance Institutions
Between 28.06.2022 and 30.04.2024 (including this date), the withholding tax rate to be applied to income and gains from asset-backed securities, mortgage-backed securities, mortgage-backed securities and asset-backed securities issued by mortgage financing institutions will be applied as 5 percent.
The relevant Presidential Decree is available here.
Sincerely,
BİLGENER
