11 September 2018 Turkey announces temporary withholding tax rates on deposit interest Turkey, through Presidential Decision no.53 published in the Official Gazette dated 31 August 2018, has announced: - The temporary reduction of withholding tax rates on the interest paid on the Turkish Lira (TL)-denominated deposit accounts by banks and participation banks.
- The temporary increase of withholding tax rates on interest paid on foreign exchange deposit accounts by banks and participation banks have been increased effective for certain terms.
Accordingly, under this Decision: - Interest paid on foreign exchange denominated deposit accounts by banks and participation banks will be subject to withholding tax rates of 20%, 16% and 13% depending on the maturity.
- Interest paid on the TL-denominated deposit accounts by banks and participation banks will be subject to withholding tax rates of 5%, 3% and 0% depending on the maturity.
The new withholding tax rates will be applied on deposit accounts limited to three months as of the publication date of the Decision (31 August 2018) and on the interest to be paid to deposit accounts opened or renewed within three months from the same date. Withholding tax (WHT) rates on interest paid on foreign exchange deposit accounts | | Previous WHT rate (%) | New WHT rate (%) | Interest from foreign exchange deposit accounts with a maturity of less than six months (including six months) | 18 | 20 | With a maturity up to one year (including one year) | 15 | 16 | With a maturity of more than one year | 13 | 13 | WHT rates on interest from TL-deposit accounts | | Previous WHT rate (%) | New WHT rate (%) | Interest from TL-deposit accounts with a maturity of less than six months (including six months) | 15 | 5 | With a maturity up to one year (including one year) | 12 | 3 | With a maturity of more than one year | 10 | 0 | Withholding tax on interest deposit income is the final tax for non-Turkish residents and it is not subject to any future declaration. For additional information with respect to this Alert, please contact the following: Kuzey Yeminli Mali Müsavirlik A.S. Istanbul - Ates Konca
ates.konca@tr.ey.com - Gamze Durgun
gamze.durgun@tr.ey.com
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ATTACHMENT PDF version of this Tax Alert Document ID: 2018-6066 | 
