Turkey's ruling party unveils 10% crypto income tax proposal

Turkey's ruling AK Party has introduced a comprehensive economic bill to parliament that includes provisions for formalizing cryptocurrency taxation and revising other tax and spending regulations.

The draft legislation, currently before the Turkish Grand National Assembly, aims to amend the Income Tax Law and Expenditure Taxes Law to establish a new regulatory framework for cryptocurrencies.

Under the proposed rules, crypto platforms that are regulated by the country's Capital Markets Law would be required to withhold a 10% tax on capital gains each quarter. This tax would apply to both individual and corporate investors, irrespective of their residency status.

Additionally, service providers facilitating crypto transactions would be subject to a 0.03% transaction tax, calculated on the sale amount or the market value of the crypto assets they broker.

Crypto brokers and other intermediaries would be responsible for conducting tax checks using their records. The legislation specifies that if a user provides inaccurate or incomplete information, tax authorities would pursue that individual for any tax shortfall.

The bill clarifies that key terms such as “crypto asset,” “wallet,” and “platform” will align with the definitions established in Turkey's Capital Markets Law, ensuring the tax regime is integrated with existing financial regulations.

The Turkish president would be granted the authority to adjust the 10% withholding tax rate, with the power to lower it to 0% or increase it to a maximum of 20%. This adjustment could be based on factors such as the type of token, its holding period, the issuer, or the type of wallet used.

The proposed bill also includes exemptions, such as exempting crypto deliveries subject to the transaction tax from value-added tax (VAT). Furthermore, foundation university hospitals would be excluded from corporate tax exemptions starting in 2027.

If approved, the provisions related to cryptocurrency taxation would come into effect two months after their official publication.