The taxation of investment income is not determined only by whether it is called “interest” or “dividend.” The source of the income, the issue and acquisition dates of the instrument, whether tax is withheld in Türkiye and the taxpayer’s status all matter. Some income is never included in the annual return regardless of the amount, while other income is reported in full once a low threshold is exceeded.
Legal Nature of the Practice and How It Differs from Other Obligations
Income from movable capital (menkul sermaye iradı) is income from the use of capital; gains from selling an investment instrument may fall into a different income category. The filing threshold and the amount exempt from tax do not produce the same result either.
Distinguishing Income from Movable Capital from Sale Gains
Interest or dividends earned from the use of capital are not the same as gains from selling an investment instrument. The coupon interest and the sale gain on a foreign bond may appear in the same account, yet they can be subject to different rules. A “total investment income” line on a bank statement cannot by itself be carried into the return.
In Türkiye, income subject to final withholding under Provisional Article 67 (Geçici 67) is assessed separately. For deposits, funds and capital market instruments, the scope of this special system is determined first. It should not be assumed that every bank payment falls under Provisional Article 67, or that a foreign account falls within it. [1; Income Tax Law Articles 75, 86 and Provisional Article 67]
Filing Thresholds for Income from Movable Capital and Income Tax Exemption Lead to Different Results
For income from movable capital that is neither subject to withholding nor exempt, a filing threshold of 18,000 TL applies in 2025 and 22,000 TL in 2026. When the threshold is exceeded, not only the excess amount but all of the relevant income is reported. This threshold may require that rental income and income from movable capital within the same scope be assessed together.
For certain income subject to withholding in Türkiye, a limit of 330,000 TL for 2025 and 400,000 TL for 2026 becomes relevant. If a deduction or exemption is to be applied depending on the type of income, the remaining amount is taken into account in the limit check. For this reason, announcing a single general “investment income exemption amount” would be misleading.
Dividends from a Resident Company
Half of the relevant dividend that an individual receives from a resident company is exempt from income tax. It is then examined whether the remaining half, together with other income legally included in the aggregation, exceeds the filing threshold. When a return is required, the gross dividend, the exemption and the withholding are shown separately, and the crediting rule for withholding (stopaj) applies.
For example, a person who received 800,000 TL in gross dividends in 2025, and who has no other income in this example, has 400,000 TL left after the exemption, which exceeds 330,000 TL. A return is therefore required. Using half of the net amount paid into the bank as the basis would be incorrect. The right to credit the full withholding should not be confused with the inclusion of the post-exemption amount in the return. [1; Income Tax Law Articles 22, 86]
Foreign Dividends and Eurobonds
The half exemption for company dividends in Türkiye is not applied automatically to dividends received from a foreign company. For the special exemption for earnings from foreign participations, the participation ratio, transfer and other conditions are examined separately. The exemption for income earned abroad introduced in 2026 for certain persons resident in Türkiye is a separate regime that requires an application.
Eurobond coupon interest and gains from selling eurobonds are calculated separately. For income in foreign currency, the amount must be valued in Turkish lira (TL); which earnings the exchange-rate difference falls into, and on what basis it is assessed, depends on the type of transaction. The fact that the bank is located in Türkiye does not show that all income from the instrument was taxed by final withholding.
Crediting in Türkiye of tax paid in a foreign country is not automatic either. Whether it relates to the same income, and the documents, the treaty and the statutory upper-limit conditions, are examined. Commissions charged by the bank, foreign tax and custody fees should be tracked on separate lines.
A Practical Breakdown of Investment Income
| Record | Why it is needed |
|---|---|
| Name, type and ISIN of the instrument | Placing the product in the correct tax regime |
| Issue, acquisition and sale dates | Determining transitional provisions and the rate |
| Gross income, withholding and net payment | Avoiding the risk of understated gross receipts or double crediting |
| Income and exchange-rate dates | Verifying the Turkish lira calculation |
| Foreign tax document | Assessing the crediting conditions |
Is a return always required if deposit interest is high?
Income subject to final withholding under Provisional Article 67 does not, for that reason alone, require an annual return just because the amount is high. First, it is determined whether the account and the income actually fall within that scope.
Is income exempt from tax if the bank did not withhold tax?
No. The absence of withholding may also mean that there is income to be taxed through the annual return. A zero-rate final withholding and being outside the scope of withholding are different things.
Why Is Net Dividend Converted to Gross?
For dividends from a resident company in Türkiye, the annual filing threshold is not compared directly with the net amount credited to the bank account. First, the gross dividend distributed and the tax withheld are determined; the statutory half exemption is applied; and the remaining amount is assessed under the relevant income aggregation rules. If a return is required, the special rule on crediting the whole of the tax withheld on the dividend is taken into account.
For example, if the gross dividend is 1,000,000 TL, 500,000 TL remains after the half exemption. Under other conditions, this amount exceeds the 400,000 TL filing threshold for 2026. The withholding rate and the payment year should be recorded separately. The year in which the company earned its profit and the year in which the shareholder receives the dividend are not always the same; transitional provisions on older undistributed profits may also require separate review.
Documentation and Exchange-Rate Issues in Foreign Investment
A foreign bank statement may not separate transaction types by the Turkish tax categories. Coupon interest, fund distributions, sale income, return of capital and exchange-rate differences may appear in a single total gain line. For the return, each transaction should be separated according to its legal nature. Eurobond interest income and eurobond sale gains are also not subject to the same exemption and cost calculation.
Crediting in Türkiye of tax withheld in a foreign country is assessed together with whether the same income is included in the Turkish return, the documents and the statutory upper-limit conditions. A high withholding abroad does not give a right to reduce the tax on all other income in Türkiye. The applicable double taxation treaty, residence and income article should also be examined separately.
Family Members and Non-Resident Taxpayers
Spouses’ incomes are not combined in one person’s return merely because they live in the same home. For the income of a minor or a person under guardianship, statutory representation may be required; the holder of the right to the income does not change. Nor is the owner of a balance in a joint account determined solely by the name first recorded on the account.
For a non-resident taxpayer’s investment income subject to withholding in Türkiye, the result of the annual return differs from the worldwide income calculation of a resident taxpayer. Citizenship or the use of a foreign bank alone does not determine the type of taxpayer. The year-end summary should show together the income holder, residence, product, issue and acquisition dates, gross income, withholding and the filing provision that applies.
Decision to Make Before Acting and the File to Prepare
Classify investment income by income type and applicable tax regime, not by bank or brokerage firm. For foreign income, verify the gross amount, the currency conversion and the tax paid in the foreign country; do not make a filing decision based only on the net amount credited to the account.