Vergi

Taxation is one of the most important issues when it comes to making investment decisions in any country. In Turkish Tax legislation, there are currently different tax treatments for different types of investment tools and institutions. As far as current 'corporate tax' regulations are concerned, all profit, earnings or income amounts that are accrued as a result of asset management activities taking place for the management of A and B Type Funds in Turkey, are exempt from 'Corporate Tax' at the fund level.

However, according to income tax regulations in Turkey, a tax rate of 11% is applied on the profit or income amounts accrued only in B Type Funds which are directly paid by the funds to tax authorities. This 11% tax rate covers income tax and and other legal tax requirements.

On the other hand, individual investors that own shares in mutual funds of either type ( A and B ) do not have to report any income earned from these mutual funds until December 31, 2003 regardless of the amount of their investments.

Legal entitities (such as firms and institutions) which have an income or profit accrued on their investments in Type A and B Funds or which have capital gains income realized based on share price on the day of evaluation, should add these income amounts into their ordinary income or profit amounts. And they will be taxed on this total income amount.

It should also be noted that, those fund shares that belong to A Type Equity Funds which invest at least 51% of their assets only in Turkish Equities, are also exempt from tax reporting at the end of tax year and that's why companies can defer tax liabilities on their income accrued in those funds as long as they want.