Under the new withholding tax bill, which is expected to be presented to the government this week, zero withholding tax will be imposed on profits from government debt securities for both foreign and Turkish corporations, including mutual funds, while a 10 percent tax will be collected from both local and foreign individuals. The current taxation system allowing both foreign and domestic investors to pay zero withholding tax on shares will remain unchanged, the ministry said in a written statement.
The bill is expected to be put on the agenda of Parliament after discussions on a constitutional reform package, which is scheduled to start today, are completed. Turkey’s Constitutional Court ruled last year in favor of making the tax on bonds, shares and mutual funds equal for domestic and foreign investors after the government removed the tax for foreigners in 2006 in a bid to attract capital.
