10% Withholding Tax on Money Market Funds for Corporate Investors

NEW WITHHOLDING TAX PERIOD IN FUND RETURNS

With the Presidential Decision No. 11734 published in the Official Gazette No. 33362 dated September 5, 2026, an amendment was made to sub-clause (2) of clause (a) of the first paragraph of Article 1 of the Decision attached to the Council of Ministers Decision No. 2006/10731 dated 2/7/2006, and the withholding tax rate to be applied to earnings obtained from money market funds and certain free funds containing the phrase “money market” in their titles was determined as 10 percent.

With the regulation made;

The 0 percent withholding tax rate applied to incomes obtained from money market funds and free funds containing the phrase “money market” in their titles by taxpayers within the scope of the first paragraph of Article 2 of the Corporate Tax Law No. 5520 (capital companies and foreign institutions of similar nature, domestic and foreign funds) and foreign corporate investors such as country funds, institution and organization funds, and investment institutions operating exclusively for the purpose of securities investment in Turkey, has been redetermined as 10 percent.

While the 10 percent rate is directly valid for funds purchased after September 5, 2026, for funds purchased before this date, it will be valid for the portion of the earnings corresponding to the period from the publication date of the Decision until the date they are sold.

On the other hand, there is no change in the 0 percent withholding tax rate applied to the earnings obtained by the said resident and non-resident corporate investors from other securities and capital market instruments (bonds, stocks, other investment fund participation certificates other than money market funds, etc.) within the scope of paragraph 1 of provisional Article 67.

In addition, there is no change in the withholding tax rate applied to the investment fund incomes of real persons and institutions that are not currently within the scope of the 0 percent withholding tax rate application, and a withholding tax of 17.5 percent will continue to be applied over these incomes.

AMENDMENTS MADE BY PRESIDENTIAL DECISION NO. 11734

The rate in paragraph 1 of Article 1 of the Council of Ministers Decision No. 2006/10731;

Has been revised as 10 percent for the earnings obtained from the participation certificates of money market funds and free funds containing the phrase “money market” in their titles, and 0 percent for other earnings, by the taxpayers within the scope of the first paragraph of Article 2 of the Corporate Tax Law No. 5520 and those determined by the Ministry of Treasury and Finance to be of similar nature to investment funds and investment trusts established in accordance with the Capital Markets Law No. 6362 among the taxpayers operating exclusively for the purpose of obtaining securities and other capital market instrument returns and capital gains and exercising the rights attached to them.

For the earnings of those outside this scope, the rate will be applied as 10 percent.

According to Article 2 of the Presidential Decision No. 11734, it will be applied to the earnings obtained from money market fund participation certificates and free fund participation certificates containing the phrase “money market” in their titles acquired as of its publication date by the taxpayers within the scope of the first paragraph of Article 2 of the Corporate Tax Law No. 5520 and those determined by the Ministry of Treasury and Finance. For the earnings obtained from the said fund participation certificates acquired before its publication date, it entered into force on its publication date to be applied to the portion corresponding to the period passing from its publication date until the date the participation certificates are disposed of.