Türkiye increases withholding tax on money market funds to 10 percent

A Presidential Decision published in the Official Gazette has introduced a new tax regime for money market funds in Türkiye. Under the amendment to Article 67 of the Income Tax Law, the withholding tax (stopaj) rate for gains derived from money market funds and specific free funds containing 'money market' in their title has been increased from 0 percent to 10 percent.

The regulation specifically targets domestic and foreign institutional investors, including corporations, investment funds, and investment partnerships. For domestic institutional investors, these withholdings can be offset against provisional taxes declared in three-month periods, whereas for foreign institutional investors, the 10 percent deduction serves as final taxation.

The tax rate for individual investors (real persons) remains unchanged at 17.5 percent. To manage the transition, a gradual implementation method is being used: gains from fund shares acquired after the regulation's effective date are subject to the new rate, while gains from shares acquired prior to the publication date are only taxed on the portion of profit accrued between the publication date and the date of disposal.