Türkiye’s Treasury and Finance Ministry has completed preliminary work on a plan to tax so-called “hot money” flowing into money market funds, Bloomberg HT reported.
Under the proposal, gains earned by domestic and foreign institutional investors from money market funds would be subject to a 10 percent withholding tax, according to the report.
The planned measure would apply equally to resident corporations and non-resident corporations in Türkiye, with no distinction between the two categories, Bloomberg HT said.
Currently, gains generated by resident corporations from such funds are not subject to withholding tax. Instead, those earnings are taxed through provisional tax returns filed every three months.
If the regulation is enacted in line with the draft work, resident corporate taxpayers would be able to offset the withholding tax paid against their declared provisional tax liabilities, the report said.
For foreign corporations, the 10 percent withholding tax would be treated as a final tax, according to Bloomberg HT.
The report also said no changes are envisaged to withholding tax rates on gains earned by domestic and foreign individual investors.
