The taxation of investment income (menkul sermaye iradı) in 2025 is an important subject in Turkey for both individuals and company shareholders. Accurate declaration of passive income from financial investments is critical to fully comply with tax obligations. This guide provides a detailed analysis of the scope, exemptions, and declaration thresholds of investment income taxation in Turkey.
Types of Income Considered as Investment Income in Turkey
Investment income refers to earnings and revenues derived from monetary capital or assets represented by money, outside of commercial, agricultural, or professional activities. For 2025, the main income categories considered as investment income under the Turkish Income Tax Law are:
- All kinds of dividends from shares
- Profits from participation shares (e.g., limited company partners’ shares)
- Profit shares paid to the chairmen and members of boards of directors
- Interest on government bonds and treasury bills, as well as income from lease certificates issued by the Housing Development Administration, Public Partnership Administration, and Asset Leasing Companies
- All types of receivable interest
- Bank deposit interest
- Proceeds from the sale of coupons of shares and bonds before maturity
- Payments received for the transfer or assignment of participation shares
- Discount proceeds of all kinds of promissory notes
- Profit shares paid to those granting interest-free loans
- Profit shares paid by participation banks under profit-loss participation accounts
- Income from mutual fund participation certificates
Deductible Expenses for Determining Net Investment Income in Turkey
When taxing investment income, certain expenses may be deducted from gross income to determine net income. Deductible expenses include:
- Custody and insurance expenses for securities
- Collection expenses of dividends and interest (excluding costs for attending company meetings)
- Taxes, duties, and fees paid on securities and their income (excluding income tax)
🔹 Example (2025): An investor received a gross dividend of 350,000 TL from a fully resident company and paid 2,000 TL as commission for collection. The taxable net dividend will be 348,000 TL.
Taxation and Annual Return Filing Requirements for Investment Income in Turkey
The declaration of investment income depends on the type and amount of income. For 2025, the thresholds are as follows:
- Income not exceeding 18,000 TL and subject to withholding/exemption is not declared.
- Income exceeding 18,000 TL that is not subject to withholding or not exempt must be declared.
- Income exceeding 330,000 TL must be declared (even if subject to withholding).
According to Article 76 of the Income Tax Law, proceeds from coupon sales, transfer of participation shares, or redemption are not considered investment income.
Investment Income Not Declared Regardless of Amount in Turkey
The following types of income are not included in the annual tax return regardless of their amount:
- Bank deposit interest
- Profit shares from participation banks
- Repo income
- Interest from government bonds, treasury bills, and corporate bonds issued in Turkey (after 2006)
- The income portion of payments from the private pension system (BES)
- Dividends arising from capitalization of profits
Taxation of Investment Income Over 18,000 TL in Turkey
For 2025, investment income exceeding 18,000 TL that is not subject to withholding and not exempt must be declared. Examples include:
- Interest income from offshore banking
- Interest income from foreign banks
- Proceeds from pre-2006 coupon sales of shares and bonds
- All types of receivable interest
Taxation of Investment Income Over 330,000 TL in Turkey
For 2025, income exceeding 330,000 TL must be declared. This includes:
- Interest on government bonds and treasury bills issued before 2006
- Foreign-issued corporate bonds and lease certificates
- Dividends from resident companies
- Eurobond interest income
⚠️ This threshold is assessed based on total income, not on each type individually. If total income exceeds 330,000 TL, a tax return must be filed.
Investment Income Subject to Indexation in Turkey
For certain types of investment income, an indexation rate is applied to reduce the effect of inflation.
The rate for 2024 was 123.64%.
For Turkish Lira-denominated government bonds and treasury bills issued before 1/1/2006, if the indexation rate exceeds one, such income is not declared.
Income from Government Bonds, Treasury Bills, and Eurobonds in Turkey
- Government Bonds and Treasury Bills (TL-denominated)
- Issued before 1/1/2006: Not declared if indexation rate exceeds one.
- Issued after 1/1/2006: Taxed by withholding under Temporary Article 67, not declared separately.
- Government Bonds and Treasury Bills (Foreign Currency, Gold, or Indexed)
- Issued before 1/1/2006: Declared if exceeding 330,000 TL.
- Issued after 1/1/2006: Taxed by withholding, not declared separately.
- Eurobond Interest Income
- Regardless of issuance date, if Eurobond income exceeds 330,000 TL in 2025, it must be declared in full.
- No withholding applies; income must be included in the tax return.
Corporate Bonds and Lease Certificates in Turkey
- Domestic corporate bonds and lease certificates: Taxed by withholding, not declared regardless of amount.
- Foreign corporate bonds and lease certificates: Subject to 0%, 3%, or 7% withholding. If total exceeds 330,000 TL in 2025, they must be declared.
Taxation of Dividends in Turkey
- For dividends from resident companies, 50% is exempt from income tax. The remaining 50%, when combined with other income, must be declared if the total exceeds 330,000 TL. (See also our article Dividend Distribution Taxation and Declarations for Shareholders.)
- For dividends from non-resident companies, a 50% exemption may apply under certain conditions. After exemption, the remaining amount must be declared if it exceeds the threshold.
Taxation of Investment Income for Turkish Citizens Living Abroad
Turkish citizens residing abroad for more than six months are considered non-residents in Turkey.
- If their income consists solely of investment income already subject to withholding, no tax return is required.
- If they earn income not subject to withholding, such income must be declared with a separate return within 15 days, and the tax must be paid.
(For further details, see our article Declaration of Rental Income for Non-Residents.)
Deductions Applicable to Investment Income in Turkey
After declaring investment income, certain expenses and donations can be deducted to reduce tax burden:
- Life and personal insurance premiums (see our article Insurance Premium Tax Deduction – 2025)
- Education and healthcare expenses (see our article Education and Healthcare Tax Deduction – 2025)
- Documented donations and charitable contributions
- Sponsorship expenses
- Donations to special funds and foundations recognized by law
Deadlines for Filing Income Tax Returns in Turkey
For investment income earned in 2025, the Annual Income Tax Return must be filed between 1 March – 31 March 2026.
Taxes payable will be collected in two equal installments, in March and July 2026.
Accurate knowledge of the taxation of investment income in Turkey is critical for both individuals and company shareholders to fulfill their tax obligations completely. The thresholds of 18,000 TL and 330,000 TL set for 2025 vary depending on the type of income. While some incomes are excluded due to withholding or exemptions, others must be declared when exceeding the specified amounts.
The preparation of tax returns, proper classification of income and expenses, and correct application of exemptions and deductions require professional expertise.
👉 For detailed information and professional support on investment income taxation, filing processes, and other tax consultancy services in Turkey, please contact us.