Tax Break on Government Bonds and Investment Funds Extended to End of 2025
Tax
Investors in Turkey will continue to benefit from reduced withholding tax rates on select financial instruments through the end of 2025, following a Presidential Decree published in the Official Gazette and signed by President Recep Tayyip Erdoğan.
Tax Relief Extended from July to December 31, 2025
The withholding tax (stopaj) reductions—initially scheduled to expire on July 31, 2025—will now remain in effect until December 31, 2025. This extension marks the continuation of a fiscal incentive policy first introduced in 2006 by Cabinet decree, aimed at encouraging domestic investment.
Which Investments Qualify for the Tax Advantage?
The tax relief applies to a range of popular investment vehicles, including:
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Government Bonds and Treasury Bills
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Lease Certificates (Sukuk)
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Mutual Funds—particularly:
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Exchange-Traded Funds (ETFs)
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Housing Finance Funds
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Asset-Backed Securities Funds
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Dividend Distributions by select corporations and investment partnerships
What Are the Extended Withholding Tax Rates?
The Official Gazette outlines the following tax rates that will remain in effect through the end of 2025:
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10% withholding tax on government bond and treasury bill income
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0% withholding tax on income from ETFs, housing finance, and asset-backed securities funds
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15% withholding tax on dividend income, applicable under certain conditions
Investor Advantage Maintained Through Year-End
This move ensures that domestic and foreign investors can continue to enjoy lower tax liabilities on a wide range of instruments—making Turkish capital markets more appealing during a period of high inflation and tight monetary policy.
By extending the tax incentive, the Turkish government aims to sustain financial market participation, channel domestic savings into capital markets, and provide fiscal certainty for portfolio managers, corporations, and individual investors.