- Turkey’s AK Party submitted a draft law proposing a new tax framework for cryptocurrency activity.
- The proposal introduces a 10% withholding tax on crypto gains for both residents and non-residents.
- A separate 0.03% transaction tax would apply to sales and transfers mediated by regulated service providers.
(TURKEY) — Turkey’s ruling Justice and Development Party (AK Party) submitted a draft law to the Grand National Assembly on Monday that would create a new tax framework for cryptocurrency activity, including a 10% withholding tax on gains from buying and selling crypto.
The draft positions regulated crypto platforms as the main collection point, requiring them to withhold and remit the tax on gains and related income for individuals and companies, covering both residents and non-residents.
Lawmakers also proposed a separate levy at the transaction level, a 0.03% transaction tax on sales and transfers that crypto asset service providers conduct or mediate.
The draft sets out a withholding-based approach intended to bring crypto gains into a standardized compliance channel, tying payment and reporting to platforms that fall under Turkey’s regulatory system.
Under the proposal, the tax base for the 10% withholding hinges on gains calculated after deducting certain costs tied to trading, including transaction taxes and fees.
The same draft allows losses to offset gains within the same calendar year, setting a within-year netting concept for gains and losses from cryptocurrency buying and selling.
Regulated platforms would not only calculate and collect the tax but also remit it on a quarterly schedule, anchoring compliance around periodic payments by intermediaries rather than a single end-of-year settlement.
Investors who route transactions through unlicensed platforms would face a different compliance path, with the draft requiring annual declarations for that activity.
The 0.03% transaction tax would work separately from the gains-based withholding, applying to sales and transfers and falling on crypto asset service providers for the transactions they carry out or mediate.
The transaction tax would be paid monthly, creating a second remittance timetable alongside the quarterly schedule for withholding on gains and related income.
The draft includes a value-added tax provision tied to the new levy, exempting crypto deliveries that are subject to the transaction tax from VAT.
For corporate taxpayers, the proposal also classifies crypto gains as commercial income, aligning crypto profits with an established income characterization under the tax system.
Beyond fixed rates, the draft gives President Recep Tayyip Erdogan authority to adjust the withholding rate, setting a range from 0% to 20%.
The bill links that adjustment authority to factors including token type, holding period, issuer, or wallet, embedding a mechanism that could alter the withholding rate without rewriting the core tax structure.
In legislative terms, the proposal amends multiple laws to place crypto taxation and definitions on an explicit statutory footing, rather than relying on narrower provisions.
The draft changes Turkey’s Income Tax Law and Value Added Tax Law, and it amends the Expenditure Taxes Law by adding a “crypto asset transaction tax.”
The bill also amends the Capital Markets Law, defining terms including “crypto asset,” “wallet,” and “platform,” with those definitions meant to align taxation with regulatory supervision.
Timing in the draft hinges on enactment and publication, with the effective date tied to the Official Gazette rather than to a fixed calendar deadline.
If approved, crypto taxation would take effect two months after publication in the Official Gazette, a timetable that would require platforms to update operational processes in a short window.
The proposal comes as Turkey maintains a split posture on crypto use: crypto ownership and trading are legal, while payments have been restricted since 2021, with payments banned since April 2021.
Licensing also sits in the backdrop of the tax plan, with crypto asset service providers required to obtain Capital Markets Board (CMB) licenses by June 30, 2026.
The existing licensing framework sets financial and fee requirements, including minimum TRY 50 million capital and 2% annual fees to the CMB and TĂśBÄ°TAK.
Market scale has become part of the policy case for a standardized approach, with Turkey’s crypto market hitting nearly $200 billion in transaction volume last year.
The draft law frames the tax structure as a formalization step, tying a gains-based withholding model and a transaction tax to regulated intermediaries that can calculate, collect, remit and report.
For investors, the proposal would move tax collection closer to the point of transaction, as the 10% withholding would be taken through platforms and sent on a quarterly schedule.
For platforms, the structure assigns the practical workload of computing taxable gains after allowable deductions, applying within-year loss offsets as permitted, withholding the tax, and remitting it on time.
The transaction tax creates an additional compliance layer, requiring service providers to calculate the 0.03% levy on sales and transfers and pay it monthly for activity they conduct or mediate.
The rate-setting authority for the withholding tax adds an element that could affect planning assumptions, because the draft allows adjustments anywhere between 0% and 20% based on the specified factors.
The proposal sits with the Grand National Assembly for consideration, and its core start trigger remains publication in the Official Gazette if lawmakers approve it.
Investors and crypto asset service providers are likely to watch the legislative process for how reporting and documentation obligations apply in practice under the new definitions of “crypto asset,” “wallet,” and “platform,” as the bill moves through parliament.
