Your Net Return May Fall When You Invest
Official titleDecision on the Withholding Rates Set Out in Provisional Article 67 of Income Tax Statute No. 193 (Decision No. 11734)
Presidential Decision No. 11734 amended the withholding tax rates applicable to gains obtained from investment funds pursuant to Provisional Article 67 of the Income Tax Statute. Accordingly, it was decided that a 10% withholding tax would be applied to unit gains from money market funds and free funds whose names include the phrase “money market.”
Details of the Regulation
Presidential Decision No. 11734, dated 4 September 2026, amended the relevant paragraph of the Decision in the annex to Council of Ministers Decision No. 2006/10731, dated 22/7/2006, pursuant to the provision of Provisional Article 67 of Income Tax Statute No. 193. Through this amendment, the tax rates applied to income obtained from capital market instruments have been updated.
Under the amendment, the withholding tax rates have been redetermined for taxpayers subject to Corporate Tax Statute No. 5520, as well as similar entities designated by the Ministry of Treasury and Finance, such as investment funds and investment companies established under the Capital Markets Act that exclusively engage in obtaining income from movable securities, capital market instruments, and value gains. Accordingly, a 10% withholding tax will be applied to gains obtained from the units of money market funds and free funds whose names include the phrase “money market,” whereas a 0% withholding tax will be collected on the other gains of such funds. The 10% withholding tax rate will continue to apply to other gains falling outside this scope.
The Decision’s entry into force date is specified in Article 2. The new rates for gains obtained from the units of money market funds and free funds containing the phrase “money market” shall enter into force on the date of publication of the Decision and shall apply immediately to units acquired as of that date. For units acquired before the publication date, the new rates shall apply to the portion corresponding to the period between the publication date and the disposal date. The other provisions shall also enter into force on the publication date. The provisions of this Decision shall be enforced by the Minister of Treasury and Finance.
Questions You Might Have
- What fundamental change was made by this Decision to the withholding tax rates applicable to investment fund gains?
- A 10% withholding tax has begun to be applied to gains obtained from the units of money market funds and free funds containing the phrase “money market,” which previously had a withholding tax rate of 0% in certain categories.
- Do the new withholding tax rates also apply to investment fund units acquired before the Decision was published?
- Yes, a 10% withholding tax will be applied to the portion of gains corresponding to the period from the publication date of the Decision until the disposal date for such fund units acquired before the publication date of the Decision.
- Who is responsible for enforcing the Decision?
- The Minister of Treasury and Finance is responsible for enforcing the provisions of the Decision.
Key Terms
- Tevkifat
- The transaction by which tax is withheld and collected at its source from a receivable or debt, or the amount withheld.
- Katılma Payı
- A unit in an investment fund that represents the investor’s participation in the fund and grants the right to own a portion of the fund’s portfolio.
- Para Piyasası Fonu
- A type of investment fund that invests in short-term, liquid, and low-risk movable securities and generally provides a risk-free return.
- Serbest Fon
- A less restricted type of fund that has broader authority regarding investment strategies and is generally intended for qualified investors.
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REGAS Commentary
This Decision will directly affect both individual and institutional investors who invest in money market funds. Increasing the withholding tax rate from 0% to 10% for certain fund gains may reduce investors’ net returns. This may lead investors to reconsider their portfolio strategies and may affect the appeal of investments of this type, which are regarded as risk-free. Investors and financial professionals should update their financial planning by taking this change into account.