September 16, 2022

Withholding on share certificates traded on Borsa Istanbul

Return of participation shares of securities investment funds established in accordance with the Capital Market Law to the relevant fund, incomes arising from their sale to third parties and periodical returns obtained during the period they are held, and incomes obtained from trading of share certificates of securities investment association, are taxed through withholding within the scope of temporary article 67 in Türkiye.

The withholding rate is 10% for real persons and 0% for institutions. Income from the participation shares of share certificate-intensive funds is taxed at 0% for both natural persons and corporations.

On the other hand, in accordance with the Presidential Decision dated 22/12/2020 and numbered 3321, except for variable, mixed, eurobond, foreign borrowing, foreign, hedge funds and mutual funds with the phrase “currency” in their titles, 0% withholding rate is applied for income and gains from mutual funds acquired between 23/12/2020 and 31/3/2022 (including this date).

Income arising from the disposal of investment funds held for more than one year, of which at least 51% of the portfolio consists of stocks traded in Borsa Istanbul, are not covered by withholding.

It is not necessary to submit an annual declaration for these incomes.

Source: Revenue Administration of Republic of Türkiye
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