The Period of the Low Withholding Rates Related to Deposit Interest and Dividends Paid by Participation Banks are Extended

Through the promulgation of the President Decision No. 3032, published in the Official Gazette dated 30th September 2020, the withholding tax rates on the interest earned from Turkish Lira deposit accounts and the dividends paid to participation accounts by participation banks were temporarily reduced. Afterwards, the period of the concerning rate reductions was extended until 31 March 2021 through the President Decision no. 3321 published in the Official Gazette dated 23 December 2020 and numbered 31343.

This time, the period of the concerning rate reductions has been extended until 31 May 2021 through the President Decision no. 3755 published in the Official Gazette dated 1 April 2021 and numbered 31441 (“Decision”).

Through the Decision, withholding tax will be applied at the rates of 0%, 3% and 5%, depending on the term, on the TRY deposit interests and the dividends paid by participation banks in return for a TRY participation account until 31 May 2021.

The aforementioned withholding rates will be applied on interest and profit share to be paid to demand and private current accounts until 31 May 2021 (including this date) and interest and profit share to be paid to accounts opened between 30 September 2020 and 31 May 2021 (including this date) or whose maturity is renewed between these dates.

You may find the full text of the Decree here.