Withholding Tax Rate on Money Market Funds Raised to 10 Percent
In accordance with the decree published in the Official Gazette, the tax rate on earnings from money market funds has changed for corporate tax payers and investment funds.
With the new Presidential Decree published in the Official Gazette, the zero withholding tax application on earnings obtained by corporate tax payers, investment funds, and partnerships from money market funds has been terminated, and the rate has been raised to 10 percent.
Details of the Withholding Tax Rate Change
The Presidential Decree regarding the withholding tax rates included in the relevant article of the Income Tax Law was published in the Official Gazette and entered into force. As a result of this new regulation, the withholding tax on earnings from money market funds and free funds bearing this title in their name was increased to 10 percent.
The withholding tax rate, which was previously applied as zero, has been updated with the new decree. However, no changes were made to the zero withholding tax application valid for other earnings of the taxpayers in question outside of these funds.
Transition Provisions for Existing Funds
The newly determined withholding tax rate will apply directly to earnings obtained from funds purchased as of the publication date of the decree.
In the event that funds acquired before the entry into force of the decree are subsequently disposed of, a special transition provision will be put into effect, and calculations covering the past period will be made.
A 10 percent withholding tax deduction will also be applied to the portions corresponding to the earnings obtained from funds acquired on earlier dates, from the date of the published decree until the time of their disposal.