Published in the Official Gazette: New decision for Currency-Protected Deposit accounts

Withholding tax rates applied to Currency-Protected Deposit (KKM) and participation accounts have been increased.

According to the decision published in the Official Gazette, the reduced withholding tax rate application for interest and profit shares obtained from Turkish Lira (TL) deposit and participation accounts will continue. For term deposit/participation accounts opened or renewed between August 1 and October 31, the withholding tax rates on interest and profit shares will continue to be applied as 7.5 percent for accounts with maturities up to 6 months (including 6 months), 5 percent for accounts with maturities up to 1 year (including 1 year), and 2.5 percent for accounts with maturities longer than 1 year.

The withholding tax rates applied to TL deposit and participation accounts will now be applied to interest and profit shares obtained from KKM and participation accounts. The 0 percent withholding tax rate previously applied to KKM and participation accounts will be applied as 7.5 percent for accounts with maturities up to 6 months (including 6 months) and 5 percent for accounts with maturities up to 1 year (including 1 year) on interest and profit shares paid to KKM/participation accounts opened or renewed between August 1 and October 31. For accounts opened or renewed before August 1, the reduced rate (0 percent) will continue to be applied.

INCOME OBTAINED FROM INVESTMENT FUNDS

The 7.5 percent reduced withholding tax rate application valid for income obtained from investment funds will continue.

In order to encourage investors to turn towards securities issued in Turkish Lira, the duration of the reduced withholding tax application for income obtained from investment funds whose portfolios consist of Turkish Lira and securities issued in TL has been extended until October 31.

Within the scope of the regulation, a 7.5 percent reduced withholding tax will also be applied to income to be obtained from participation certificates acquired between August 1 and October 31. For income obtained from variable, mixed, Eurobond, foreign debt, foreign, free funds, and investment funds with the term "foreign currency" in their titles, a 10 percent withholding tax will continue to be applied as before.

DEBT INSTRUMENTS ISSUED BY BANKS

The duration of the reduced withholding tax application for income obtained from bonds and bills issued by banks and income obtained from lease certificates where the fund user is these banks has been extended until October 31.

Within the scope of the regulation, the withholding tax rates to be applied on income to be obtained from these securities acquired during the mentioned period will continue to be applied as 7.5 percent for those with maturities up to 6 months (including 6 months), 5 percent for those with maturities up to 1 year (including 1 year), and 2.5 percent for those with maturities longer than 1 year.

The 0 percent withholding tax application for income obtained from government bonds and Treasury bills, as well as lease certificates issued by asset leasing companies established by the Treasury, has been extended until October 31.

With the regulation, it has been decided to extend the validity period of the reduced withholding tax (7.5 percent) application valid for income and earnings obtained from asset-backed securities, mortgage-backed securities, asset-covered securities, and mortgage-covered securities issued by mortgage finance institutions established in accordance with the provisions of the Capital Markets Law until October 31.