By way of Decree No. 2008/14272, published in the Official Gazette of 13 November 2008, the Council of Ministers reduced the withholding tax rate on certain qualifying capital gains derived by resident individuals and companies from 10% to 0% with effect as of 14 November 2008. This zero-percent tax is final for resident individuals. For resident companies, however, such gains are subject to 20% corporate income tax levied by assessment with the annual tax return.
Under the Decree, the 10% tax withheld by banks, stock brokers and intermediary institutions on the capital gains derived by resident individuals and companies from the disposal of shares (except shares in security investment partnerships) of resident corporations acquired on or after 1 January 2006 is reduced to 0%. The withholding tax rate on such capital gains of non-residents was previously reduced to 0% by the Act 5527 on 7 July 2006.
For resident individuals and companies, the capital gains derived from the sale of government and private bonds issued on and after 1 January 2006, however, are still subject to the 10% withholding tax. Non-resident individuals and companies have been subject to a final withholding tax at 0% on such gains since 7 July 2006.