The Withholding Rate on Earnings from Shares of Venture Capital Investment Fund and Real Estate Investment Fund Participation Shares Held for More than Two Years Has Been Reduced to 0%

Through the promulgation of the Presidential Decision No. 4454 (“Decision”), published in the Official Gazette dated 4^th September 2021 and numbered 31588, amendments have been made to the subparagraphs (a) and (ç) of Article 1/1 of Decree of the Council of Ministers numbered 2006/10731 that determines the withholding rates regulated in Article 67 of the Income Tax Law No. 193.

Through the Decision, withholding rates on earnings from shares of venture capital investment fund and real estate investment fund participation shares that are held for more than two years have been reduced to %0.

Besides, as it is known, through the Presidential Decision No. 3321, the withholding tax rate to be applied for the earnings to be obtained from the participation shares of some mutual funds acquired between 23^rd December 2020 and 31^st March 2021 was determined as 0% and this application was extended until 30^th December 2021. Thus, it was possible to apply 0% withholding tax instead of 10% on the income and earnings to be obtained from the participation shares of some funds acquired by natural persons until this date.

In the absence of an additional time extension regarding the said application, a two-year holding condition will be sought in order to apply 0% withholding tax on the profits to be obtained from the venture capital investment fund and real estate investment fund participation shares acquired as of 1^st October 2021.

The Decision enters into force on the date of its publication.

You may find the full text of the Decision here.