Income Tax Law Provisional Article 67 Withholding Periods Extended
With the Presidential Decree No. 6618 published in the Official Gazette No. 32058 on 29.12.2022, amendments were made to the Council of Ministers Decision No. 2006/10731, extending the discounted withholding tax period for the income derived from deposit and participation accounts, as well as income from currency-protected deposit accounts, some investment funds, and bank financing bond income, until 30.06.2023.
Additionally, the decree continues to apply a 5% withholding tax rate on the income and gains derived from products issued by mortgage financing institutions until 30.06.2023.
The withholding tax rates under this decree are outlined below:
1) Withholding Tax Rates for Deposit Interest and Profit Shares
a) Withholding Tax Rates on Deposit Interest
- For demand and notice accounts and accounts with a term of up to (and including) 6 months: 5%
- For accounts with a term of up to (and including) 1 year: 3%
- For accounts with a term longer than 1 year: 0%
- For accounts with a variable interest rate based on inflation for terms longer than 1 year: 0%
- For currency-protected term deposit accounts and deposit accounts converted from foreign currency to Turkish lira, the withholding tax rate is 0%.
- For deposit accounts in gold converted to Turkish lira, the withholding tax rate is 0%.
b) Withholding Tax Rates on Profit Shares Paid for Participation Accounts by Participation Banks
- For demand, notice, and special current accounts, and accounts with a term of up to (and including) 6 months: 5%
- For accounts with a term of up to (and including) 1 year: 3%
- For accounts with a term longer than 1 year: 0%
- For currency-protected participation accounts and participation fund accounts in foreign currency converted to Turkish lira, the withholding tax rate is 0%.
- For participation fund accounts in gold converted to Turkish lira, the withholding tax rate is 0%.
2) Withholding Tax Rates on Bank Bonds and Certificates Issued by Asset Leasing Companies Whose Users are Banks, and on Income from Investment Funds
a) Withholding Tax Rates on Income from Lease Certificates
- For income from lease certificates with a maturity of up to (and including) 6 months: 5%
- For income from lease certificates with a maturity of up to (and including) 1 year: 3%
- For income from lease certificates with a maturity longer than 1 year: 0%
- For gains from the sale of lease certificates held for less than 6 months: 5%
- For gains from the sale of lease certificates held for less than 1 year: 3%
- For gains from the sale of lease certificates held for more than 1 year: 0%
b) Withholding Tax Rate on Income from Investment Funds
Income and gains derived from investment funds (except for variable, mixed, eurobond, foreign, and free funds, and funds with “foreign currency” in their titles) will be subject to a 0% withholding tax rate.
3) Withholding Tax Rate on Income and Gains from Products Issued by Mortgage Financing Institutions
For income and gains derived from asset-backed securities, mortgage-backed securities, mortgage-guaranteed securities, and asset-backed securities issued by mortgage financing institutions, the withholding tax rate will remain at 5% until 30.06.2023 for those acquired between 28.06.2022 and 30.06.2023 (inclusive).
You can access the relevant Presidential Decree here.
Best regards,
BİLGENER
