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Taxation of Investment Funds in Turkey

Taxation of Investment Funds in Turkey

Updated on Thursday 02nd March 2017

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NameIn Turkey, the possible fund forms are offshore companies, investment trusts and limited partnerships, and the most accurate structure will depend on the type of the assets to be invested in, and the type of investor implicated. Regarding taxation of the investment funds in Turkey, there are different levels of possible levies, so it is recommended to solicit help and guidance from our lawyers in Turkey.

Important details about taxation of investment funds in Turkey

The taxation of investment funds in Turkey is separated by a few exemptions and here we mention the venture capitals funds, the real estate investment funds, the securities funds and the investment fund with a portfolio that includes gold and other precious metals.
The income derived from warrants, foreign exchange, loans and financial assets, derivatives and commodity transactions by the foreign investment fund with the consideration of local portfolio management businesses are not subject to tax. The portfolio management company and its associated parties won’t have the right to more than 20% on the income of the foreign investment funds, after withholding the levies established for the services. It is good to know that The Council of Ministers in Turkey has the right to reduce the mentioned rate down to 0% or to raise it up to 40 percent.
Take into consideration that the participation exemption is offered for the earnings of the portfolio management companies in return for their significant investments to foreign funds, encountering the conditions mentioned above. Our Turkish lawyers can offer a great approach and suitable information for foreign investors interested in taxation of investment funds in the country.

The mutual fund taxation in Turkey

Incomes derived from mutual investment funds in Turkey is not subject to taxes. The withholding tax for non-resident businesses is related to a rate of 0% to incomes resulting by external equity companies in the nature of the mentioned enterprises and by foreign corporations which are regulated by the Ministry of Finance to be comparable to mutual funds and investment trusts created with the Capital Markets Law.
Our team of lawyers in Turkey can help you with personal assistance and suitable information about the taxation of the investment funds in Turkey, so please feel free to contact us.