In the Decision published in the Official Gazette on 1/11/2024, numbered 32709, and included as part of Presidential Decree No. 9075, amendments to the attached Decision of the Council of Ministers No. 2006/10731 extend the reduced withholding tax applied to income from deposits, participation accounts, and certain securities, with modifications to some rates, until January 31, 2025.
However, the reduced withholding tax period for income from certain investment funds has not been extended and has thus ended.
Date of Publication: 1/11/2024 – 07:14
EXPLANATORY NOTE
Decision on Withholding Tax Rates under Provisional Article 67 of the Income Tax Law No. 193 (Decision No: 9075) No: 9075
Official Gazette Date: 01/11/2024
Official Gazette No: 32709
- Decision on Withholding Tax Rates under Provisional Article 67 of the Income Tax Law No. 193 (Decision No: 9075)
In line with the authority provided in the seventeenth paragraph of Provisional Article 67 of the Income Tax Law No. 193, the phrase “31/10/2024” in the first paragraph of Articles 2, 3, 4, and 5 of the provisional provisions attached to the Decree of the Council of Ministers No. 2006/10731 has been replaced with “31/1/2025,” extending the validity period by three months until 31/1/2025 (inclusive) under the attached Decision of Presidential Decree No. 9075, dated 31/10/2024.
The regulations introduced in this Presidential Decree provide extensions and rate modifications to the reduced withholding tax rates applied to:
- Interest and profit shares paid on foreign exchange-protected accounts (including YUVAM) and other Turkish lira (TL) deposit/participation accounts;
- Income from bonds and bills issued by banks, as well as income from lease certificates issued by asset leasing companies where the bank is the fund user;
- Income from asset-backed securities, mortgage-backed securities, asset-covered securities, and mortgage-covered securities issued by mortgage financing institutions established under the Capital Markets Law;
- Income from government bonds, treasury bills, and income from lease certificates issued by asset leasing companies established under Law No. 4749.
As of November 1, 2024, the reduced withholding rate of 7.5% on income from investment funds will no longer be extended, and income derived from participation shares acquired from this date will be subject to the general withholding rate of 10%. Thus, except for gains from equity-intensive fund participation shares, which are taxed at a rate of 0%, and gains from venture capital investment fund and real estate investment fund participation shares held for over two years, all other investment fund participation share income will be subject to a 10% withholding rate.
Additionally, income from participation shares acquired before 1/11/2024 will continue to be taxed at the reduced rates applicable at the time of acquisition.
For income from variable, mixed, eurobond, external debt, foreign, free funds, and those containing “foreign currency” in their title, where the reduced rate does not apply, withholding will continue at 10%, as previously applied.
Source: Official Gazette Date: November 1, 2024
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