Withholding Tax Rate on Money Market Funds Raised to 10 Percent
A new regulation was enacted to increase the tax withholding rate applied to the earnings of money market funds and related alternative funds.
The withholding tax rate applied to the earnings of money market funds and alternative funds carrying this title was raised from 0 percent to 10 percent.
Published in the Official Gazette
The decision regarding the tax withholding to be applied on earnings derived from money market funds entered into force after being published in the Official Gazette.
New Withholding Tax Regulation
Pursuant to the relevant article of the Income Tax Law, changes were made to the withholding regime for domestic and foreign institutional investors.
The withholding tax rate on participation share earnings was increased to 10 percent exclusively for money market funds and alternative funds containing this expression in their titles.
Implementation Details for Investors
Domestic institutional investors will be able to deduct the withheld amounts from the provisional tax to be declared in three-month periods.
For foreign institutional investors, the 10 percent deduction will constitute a final taxation.
The 0 percent withholding tax application will continue as before for all other investment earnings outside of these funds.