Withholding tax rates on interest income modified

On 1 January 2013, the Official Gazette No. 28515 published Decree No. 2012/4116 of the Council of Ministers, which modifies the withholding tax rates applicable on:

-		interest income derived from deposit accounts(except interest paid between resident banks),
-		profit shares received from interest-free loans, and
-		profit shares received from profit/loss partnership certificates.

Accordingly, different withholding tax rates will apply, depending on the maturity date of deposit accounts and profit shares as follows:

Interest on accounts and shares	Rate (%)
Up to 6-months maturity (including 6 months)	15
Up to 1-year maturity (including 1 year)	12
Longer maturity	10

In cases where the interest is derived from foreign currency accounts and profit shares, the abovementioned withholding tax rates are set as 18%, 15% and 13%, respectively.

Previously, a single 15% withholding tax was applicable to all these types of interest.

The Decree is effective as from 2 January 2013.