Turkey: Withholding Deduction Applied To Turkish Lira Deposits Is Extended Until December 31, 2022

A. Introduction

With the Presidential Decision numbered 5752 published under the Official Gazette dated June 28, 2022 and numbered 31880 ("Decision"), the period of the withholding deduction applied to Turkish Lira ("TRY") deposits is extended until December 31, 2022.

B. Regulations

Pursuant to article 1/1 of the Decision, the periods of withholding deduction applied to TRY deposits expiring on June 30, 2022, interest rates on time and current deposits, and withholding rates applied to dividends are extended until December 31, 2022.

In accordance with article 2 of the Decision, the withholding rate to be applied to income and earnings from the asset-backed securities, mortgage-backed securities, mortgage guaranteed securities and asset guaranteed securities issued by mortgage financing institutions (and the asset financing funds and housing financing funds founded by these institutions) acquired between June 28, 2022 and December 31, 2022 is determined as 5%.

Pursuant to article 3 and 4 of the Decision, the Decision will apply to gold deposit accounts, participation funds in gold, and deposit and participation accounts converted into TRY at conversion price from gold accounts in return for processed and scrap gold as well as the deposit and participation accounts opened within the scope of supporting the conversion to exchange-protected time deposit and participation accounts and TRY deposit and participation accounts as of June 28, 2022.

C. Effective Date

The Decision published under the Official Gazette dated June 28, 2022 has entered into force on the date of publication.

D. Conclusion

With the Decision, the period of the withholding deduction applied to TRY deposits, interest rates on time and current deposits, and withholding rates applied to dividends has been extended and the accounts falling under the scope of the Decision has been regulated in detail.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.