Turkey introduces 10% tax on income from cryptoassets

Key points:

• 10% tax on income from transactions on licensed crypto platforms.
• 0.03% levy on trades and transfers via crypto services.
• The president will be authorized to adjust the rate between 0% and 20%.

Turkey’s ruling party has submitted a comprehensive economic bill to parliament that formalizes the taxation of cryptocurrencies. The proposal introduces amendments to the income tax law and the expenditure taxes law, while also establishing a separate framework for regulating cryptoasset transactions.

Platforms subject to the capital markets law will be required to withhold a 10% tax on income generated from cryptocurrency transactions. The tax will be collected quarterly, regardless of the investor’s status — whether an individual or legal entity, resident or non-resident. The president will have the authority to reduce the rate to 0% or increase it to 20%, depending on factors such as the type of token, holding period, storage method, and other criteria.

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Additional levy and tax calculation method

The draft law also introduces a 0.03% tax on cryptoasset transactions, calculated based on the sale amount or the asset’s market value at the time of transfer. Crypto service providers executing or intermediating transactions will be responsible for paying the levy. It must be declared and paid on a monthly basis. Transactions subject to this tax will be exempt from value-added tax (VAT).

For tax base calculations, the FIFO method will be applied, meaning that in the case of partial asset sales, the cost basis of the earliest purchases will be used. Transaction fees and the operational levy paid will be deductible when determining taxable income. Losses from cryptoasset transactions may only be offset against profits from the same type of assets and only within the same calendar year. Income taxed at the source will not need to be included again in individuals’ annual tax returns.

If adopted, the crypto taxation provisions will enter into force at the beginning of the second month following their official publication.